On Tuesday, a CBI special court in Mumbai convicted businessman Brian Mario Castelino, his wife Rajini Castelino, their company R Tec Systems (India) Private Limited, and former Corporation Bank official Alam Mahmud Shaikh in a ₹6.82 crore software export loan fraud case. The court sentenced all four to one year of rigorous imprisonment and imposed a fine of ₹25,000 each.
The case, which dates back several years, involved the illegal availing of post-shipment credit through falsified export documentation and collusion between the borrowers and the bank insider.
Modus Operandi: Fake Softex Forms and Software Invoices
According to the court, the accused submitted 28 falsified Softex forms—documents required to declare software exports—and fabricated software invoices for a healthcare company named C-Bay System Limited. These documents were used to avail post-shipment credit from Corporation Bank’s Ghatkopar (West) branch.
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Post-shipment credit is meant to help exporters receive funding after goods are shipped but before receiving payments from importers. In this case, the accused falsely claimed to have completed software exports, enabling them to access loans without any real transaction.
Glaring Gaps in Certification and Bank’s Oversight
The court found that the original Softex forms submitted to the bank were neither numbered nor certified by any authorized officer. As per procedure, the Software Technology Parks of India (STPI) must certify such forms, with one copy sent to the Reserve Bank of India and another to the exporter. The court ruled that submission of uncertified documents clearly indicated fraud.
Shaikh, then Forex Manager at the bank, was found guilty of facilitating the fraud by approving these bogus documents. He was also convicted under the Prevention of Corruption Act for abusing his official position.
Assets, Conspiracy, and the Broader Impact
The fraud extended beyond paperwork. The court observed that Corporation Bank disbursed over ₹6.82 crore based on 35 software export invoices—only seven of which were verified. Additionally, two houses already mortgaged with another bank were offered again as fresh collateral to secure these loans.
Special judge Amit V Kharkar held the accused guilty under multiple sections of the Indian Penal Code, including criminal conspiracy, cheating, forgery, and use of forged documents. The ruling highlights the vulnerability of financial institutions to internal collusion and document-based fraud in export-related financing.
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