CBI books 2 builders over ₹6.88 cr SBI loan fraud

The case was registered by the CBI’s Mumbai unit on May 15 against partners and personal guarantors B Shah and M Makwana, along with unidentified public servants and others

MUMBAI: A city-based construction firm allegedly used a flat already sold to a buyer as collateral for a bank loan and later diverted part of the borrowed funds to clear a partner’s income-tax dues leading to an alleged ₹6.88-crore loss to the State Bank of India (SBI). The CBI has now booked the firm’s two partners.

CBI books 2 builders over ₹6.88 cr SBI loan fraud

The case was registered by the CBI’s Mumbai unit on May 15 against partners and personal guarantors B Shah and M Makwana, along with unidentified public servants and others, based on a complaint lodged by SBI’s regional manager.

The accused have been booked under provisions related to criminal conspiracy, cheating, criminal misappropriation and criminal misconduct under the IPC and the Prevention of Corruption Act.

According to the complaint, the construction firm had approached SBI for funding to complete a residential project in Borivali (West). The bank subsequently sanctioned loans worth ₹7.8 crore.

The loan account, which remained operational between December 2018 and February 2023, was classified as a non-performing asset (NPA) in February 2023. With outstanding dues of ₹6.88 crore, the account was later reported as a fraud to the Reserve Bank of India (RBI) in April 2025.

Further, the bank also alleged that part of the loan amount was diverted towards payment of the income-tax liabilities of one of the partners, while another portion was routed to related entities.

SBI alleged that the borrowers fraudulently induced the bank to sanction credit facilities and subsequently diverted the funds for purposes unrelated to the project, resulting in a wrongful loss of ₹6.88 crore.