Archive · 19 Sep 2026
Madhya Pradesh Loan Scam Allegedly Diverted MSME Funds and Machinery
Officials in Madhya Pradesh say they found a suspected scam involving business loans.
A businessman discovered that a Rs 10 lakh loan had been approved in his name.
He said he received neither the money nor the machinery the loan was supposed to buy.
Investigators allege that forged documents were used to obtain the loan.
They say Rs 8.85 lakh was moved among several people instead of being used to buy machinery.
The bank reportedly processed the loan in about four hours.
Investigators also said the bank did not inspect the business or properly check the machinery seller.
They found five loans linked to the same branch and three other similar cases.
Several people, including a branch manager and suppliers, were charged under cheating and conspiracy provisions.
The Economic Offences Wing uncovered an alleged loan scam involving a borrower, bank officials and machinery suppliers.
A businessman said an MSME loan of Rs 10 lakh was sanctioned in his name without his knowledge.
Investigators allege forged documents were used and Rs 8.85 lakh was withdrawn and divided among suspects.
The loan was processed in about four hours without a site inspection or proper supplier verification.
The same branch allegedly handled five similar loans and three additional cases in March 2024.
- Who
- The Economic Offences Wing investigated a businessman’s complaint and named a bank branch manager, financial advisor and machinery-supplier representatives as suspects.
- What
- An alleged loan scam involved an MSME loan sanctioned without the complainant’s knowledge, with funds allegedly diverted and machinery not delivered.
- When
- The main loan was processed on March 21, 2024; similar loans were allegedly sanctioned in March 2024.
- Where
- The alleged activity involved a bank’s MP Nagar branch in Bhopal, Madhya Pradesh.
- Why
- Investigators allege that forged documents and collusion were used to obtain and divert loan money intended for machinery.
- Loan sanctioned
- Rs 10 lakh
- Amount allegedly withdrawn
- Rs 8.85 lakh
- Loan processing time
- About four hours on March 21, 2024
- Machinery received
- The complainant reportedly received none
- Loans linked to maternal uncle
- Five loans from the same branch within 10-15 days
- Additional similar cases
- Three loans allegedly involved the same modus operandi in March 2024
- Charges
- Sections 420 and 120-B of the Indian Penal Code