Kanpur | December 24, 2025 | A tiny, almost anonymous shop located on Kanpur’s crowded Birhana Road has emerged as the unlikely epicentre of a massive ₹3,000-crore banking fraud, raising serious questions about India’s public sector banking oversight and loan approval mechanisms. The case, now under investigation by the Central Bureau of Investigation (CBI), is being described by officials as a systematic, multi-layered financial conspiracy involving shell companies, forged documents and overseas money trails.
According to investigators, the fraud was not limited to a single loan or bank. Instead, it allegedly involved a network of companies that managed to secure thousands of crores in credit from a consortium of government-owned banks, despite having little or no real business activity on the ground.
PNB Case Opens Pandora’s Box
The scam came to light following the arrest of businessman Rajesh Bothra in connection with a ₹32-crore fraud involving Punjab National Bank (PNB). As investigators dug deeper into his financial dealings, they uncovered links to multiple loans taken from different banks under various company names.
What initially appeared to be an isolated case soon revealed a far larger pattern. The CBI found that several loans were sanctioned under the guise of different projects and businesses, but actual control of funds remained with the same corporate group, suggesting deliberate concealment and misrepresentation.
Three Companies Under the ‘Frost’ Brand
CBI officials say the group operated primarily through three companies under the ‘Frost’ brand:
- Frost Infrastructure & Energy Ltd
- Frost International Ltd
- Frost Global Ltd
While these firms were shown as independent entities in official records, investigators allege that their financial decisions, fund flows and operational control were handled by the same promoters. This structure, officials believe, was used to bypass lending limits and reduce scrutiny.
Offices on Paper, Silence on the Ground
One of the most alarming findings is related to the registered address of Frost Infrastructure & Energy Ltd. During on-site verification, investigators reportedly found no evidence of large-scale business operations at the Birhana Road location listed as its office.
Despite this, the companies managed to secure nearly ₹3,000 crore in loans from a banking consortium that included State Bank of India, Allahabad Bank, Oriental Bank of Commerce, Union Bank of India, Indian Overseas Bank and Bank of India.
The CBI is now examining how such substantial loans were approved without adequate due diligence, physical verification or effective post-sanction monitoring.
CBI Alleges Elaborate Forgery
According to the CBI, the accused employed a range of fraudulent practices to obtain and divert funds. These allegedly included fake Bills of Lading, forged purchase and sales documents, and paper transactions routed through offshore entities.
Investigators claim banks were misled into believing that the companies were actively engaged in infrastructure and energy projects, while in reality there was little evidence of project execution or asset creation.
Complex Foreign Money Trail
The probe has also uncovered a complex web of international transactions. Officials say funds disbursed by Indian banks were first transferred to Fareast Distribution & Logistics, a company allegedly linked to Bothra’s wife. From there, the money was routed to Landmark Investment Shipping, based in Dubai.
The agency believes this layered routing was designed to mask the origin, ownership and final use of the funds, making detection and recovery significantly harder.
Startup Investments Raise Eyebrows
In a startling development, the CBI has found indications that a portion of the allegedly siphoned money was later shown as investments in well-known Indian startups. Names that have surfaced during the probe include Swiggy, Faasos, BlueStone, Sugar Cosmetics, HomeLane, Beer Café and Travel Triangle.
Investigators are now examining whether these investments followed proper regulatory and compliance norms, and whether the source of funds was fully disclosed to the recipient companies.
Public Sector Banks Under the Scanner
Perhaps the most troubling aspect of the case is the role of public sector banks. Despite multiple lenders being involved, only Punjab National Bank has so far initiated formal legal action. The apparent inaction of other consortium members has triggered sharp criticism from financial experts.
Analysts say the case highlights serious failures in credit appraisal, risk assessment and ongoing loan monitoring, particularly in large consortium lending.
More Arrests, Bigger Names Possible
CBI officials indicate that the investigation is still unfolding and could lead to more arrests and wider disclosures. The agency is currently analysing bank records, company filings and international transaction data to identify additional beneficiaries and facilitators.
What began as a routine fraud case has now snowballed into a major test of India’s banking transparency and accountability. The story of a nondescript Kanpur shop linked to thousands of crores in loans has exposed glaring gaps in the system—gaps that investigators say must be addressed to prevent similar scams in the future.
