A Special Central Bureau of Investigation (CBI) Court in Chennai has sentenced eight persons, including two former officials of the State Bank of India (SBI), to 10 years of rigorous imprisonment each in a ₹1.97 crore dairy loan fraud case. The court also imposed substantial monetary penalties on the convicts. The judgment was delivered on July 31.
The convicted former SBI officials are N. Gopalakrishnan, the then Branch Manager of SBI’s Chengam branch, and P. Balamurali, the then Rural Marketing and Recovery Officer. The other six convicts are R. Venkataraman, S. Ravi, D. Sankar, R. Rajan, P. Pannerselvam, and T. Murugan. All eight have been sentenced to 10 years of rigorous imprisonment.
The court also imposed financial penalties on the convicts. N. Gopalakrishnan, P. Balamurali, R. Venkataraman, S. Ravi, and D. Sankar have each been fined ₹50 lakh, while R. Rajan, P. Pannerselvam, and T. Murugan have each been directed to pay a fine of ₹20 lakh.
The case relates to the period between October 2007 and May 2008, during which 728 dairy loans amounting to approximately ₹2.33 crore were sanctioned by SBI’s Chengam branch. The investigation later revealed large-scale irregularities in the loan approval process, resulting in a wrongful loss of ₹1,97,27,692 to the bank.
The case originated on September 23, 2011, when the Central Bureau of Investigation (CBI) registered an FIR based on a complaint filed by the Regional Manager of SBI’s Region-V in Chengalpet. Investigators alleged that the bank officials conspired with K. Purushothaman, proprietor of Kanthamma Milk Chilling Plant, and others to fraudulently sanction dairy loans under a tripartite arrangement involving the milk chilling plant.
According to the prosecution, forged loan applications, fabricated documents and other falsified records were submitted in the names of purported borrowers to obtain the loans. The investigation also found that mandatory pre-sanction and post-sanction procedures for dairy loans were not followed, enabling the fraudulent disbursement of funds and causing significant financial loss to the bank.
After completing its investigation, the CBI filed a chargesheet against 10 accused on June 25, 2013. The Special Court framed charges on May 1, 2016, and the trial subsequently commenced. During the course of the proceedings, two accused—K. Purushothaman and former SBI Deputy Manager (Advances) K. Ravichandran—passed away, leading to the abatement of proceedings against them.
Following an extensive trial, the prosecution presented documentary evidence and witness testimonies before the court. After examining the evidence on record, the court found the remaining eight accused guilty of offences related to bank fraud and criminal conspiracy. It subsequently sentenced each of them to 10 years of rigorous imprisonment and imposed substantial fines.
The verdict is being viewed as a significant step towards strengthening accountability in the banking sector and reinforcing transparency in the loan sanction process. Investigating agencies maintain that strict legal action against fraudulent loan schemes involving forged documents and criminal collusion is essential to protect public sector banks, safeguard public funds and deter similar financial crimes in the future.
