The Central Bureau of Investigation (CBI) has conducted searches at multiple premises in Mumbai and Kochi in connection with an alleged ₹133.52 crore bank fraud that reportedly caused significant losses to the State Bank of India (SBI). The agency has registered a case against Furnace Fabrica (India) Ltd and its former directors over allegations that they obtained enhanced credit facilities by submitting false financial information and subsequently diverted the loan funds from their sanctioned purpose.
According to the CBI, the preliminary investigation indicates that the company’s former directors and other associated individuals allegedly entered into a criminal conspiracy to secure higher credit limits from SBI by furnishing misleading financial statements and other false documents. The agency alleges that the fraudulent conduct resulted in a wrongful loss of approximately ₹133.52 crore to the bank.
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Investigators further allege that after obtaining the loans, the funds were not utilised for the purposes for which they had been sanctioned. Instead, the money was allegedly diverted and siphoned off for other uses, causing financial loss to the lending institution and violating the terms of the credit facilities.
Following the registration of the case, the CBI carried out coordinated search operations at several locations in Mumbai and Kochi. During the raids, officials recovered documents, digital records, and other materials considered relevant to the ongoing investigation. The seized evidence is being examined to establish the nature of the alleged fraud and identify the flow of funds.
The agency is now investigating the full extent of the alleged conspiracy, identifying the roles of all individuals involved, and tracing the end-use of the loan proceeds. Investigators are also examining whether any public servants or additional private individuals played a role in facilitating the alleged fraud.
As part of the investigation, the CBI is scrutinising loan sanction records, banking transactions, financial statements, company accounts, and related documentation. Authorities are conducting a detailed money trail analysis to determine where the allegedly diverted funds were transferred and whether they were routed through associated entities or accounts.
At this stage, the allegations remain under investigation, and no final conclusion regarding criminal liability has been reached. The charges will ultimately be assessed on the basis of documentary, financial, and digital evidence collected during the course of the probe.
According to the Future Crime Research Foundation (FCRF), corporate bank fraud cases involving falsified financial disclosures, diversion of borrowed funds, and misuse of credit facilities underscore the need for stronger due diligence by lenders. Financial institutions should strengthen independent verification of borrower disclosures, post-disbursement monitoring, forensic audits, digital transaction analytics, and end-use verification mechanisms to detect irregularities at an early stage.
The CBI investigation remains ongoing. The agency said it will continue to examine the evidence, determine the involvement of all persons connected with the alleged conspiracy, trace the utilisation of the loan funds, and take appropriate legal action based on the findings of the investigation.
