CBI court convicts 3 in ₹48 lakh bank fraud, ex-manager get 5-year jail

A Special CBI court in Ahmedabad has sentenced three persons, including two senior bank officials to five years of rigorous imprisonment for illegally sanctioning and disbursing ₹48 lakh under a government-backed scheme on the basis of forged documents and without verifying the existence of the purported business unit.

The court convicted former Branch Manager Bhagvati Prasad, Assistant Manager Bhaskar Soni, and borrower Jayendrasinh Makwana under Sections 120-B (criminal conspiracy), 420 (cheating), and 471 (using forged documents) of the Indian Penal Code, and Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988.

All three were held guilty of colluding to defraud the bank, causing a total loss of ₹52.93 lakh.

According to the CBI case, on December 1, 2012, Jayendrasinh Makwana applied for a cash credit limit of ₹48 lakh under the ‘UCO Udyog Mitra’ scheme — a collateral-free credit facility supported by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) — claiming to set up a Cashew Processing & Oil Industry at GIDC Odhav, Ahmedabad.

The bank officials allegedly bypassed mandatory guidelines, failed to conduct basic due diligence, and sanctioned the loan despite forged invoices, fabricated business projections, and non-existent machinery and premises. The account soon turned into a Non-Performing Asset (NPA), resulting in substantial loss to the public-sector bank.

In a strongly worded judgment, the court described the case as “a somber narrative of how a beneficial government scheme, designed to be the lifeline of genuine struggling entrepreneurs, was converted into a personal windfall for a few greedy individuals.”

It noted that instead of safeguarding public money, the “custodians of public funds” abused their positions to divert crores meant for micro and small enterprises to “paper entrepreneurs”.

 The court highlighted the twofold damage caused by such white-collar crimes: direct loss to the public exchequer and the denial of opportunities to deserving entrepreneurs who genuinely need capital to grow.

The government schemes like UCO Udyog Mitra are “engines of national growth” meant to empower skilled but capital-poor citizens. 

The CBI had registered the case after UCO Bank reported the fraud. Following investigation, a chargesheet was filed and the trial concluded with the conviction and sentencing.