In a major verdict exposing irregularities in the banking system, a special court has convicted four individuals in a ₹6.43 crore loan fraud case involving UCO Bank, sentencing them to five years of rigorous imprisonment. The convicted include former bank officials—a Senior Manager, an Assistant Manager—and two private individuals.
The case pertains to UCO Bank’s Chiloda branch in Gandhinagar, Gujarat, where large-scale loans were sanctioned in 2016 by bypassing due procedures. Investigations revealed that forged documents were used to secure these loans, which were disbursed without proper verification.
Sentences delivered in two separate cases
The court delivered its judgment after hearing the matter as two distinct cases. In the first case, former Senior Manager Medam Bhagavathi Prasad, former Assistant Manager Bhaskar Rameshchandra Soni, and Jayendrasinh Makwana, proprietor of Heaven Five Enterprise, were convicted. They were sentenced to five years in jail along with a fine of approximately ₹1.33 crore.
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In the second case, the same bank officials, along with Vanrajji Prabhtaji Solanki and others, were found guilty. The court awarded five years of imprisonment and imposed a total fine of ₹72 lakh. In both cases, the court took a stern view, citing the gravity of the offence.
Case registered in 2016, chargesheet filed in 2017
The fraud came to light in 2016 following complaints of irregularities in loan disbursal. An FIR was registered on April 27, 2016. During the investigation, it was established that bank officials had misused their positions to sanction loans to multiple firms and individuals in violation of rules.
After completing the probe, the chargesheet was filed in November 2017. Following a prolonged trial and examination of evidence and witnesses, the court found the accused guilty.
17 loan accounts turned NPAs, heavy losses to bank
Investigators found that most of the loan accounts failed to repay dues on time. By December 2015, around ₹3.63 crore remained outstanding across 17 loan accounts, which eventually turned into non-performing assets (NPAs).
This resulted in significant financial losses to the bank. Officials had allegedly ignored mandatory due diligence and verification procedures while approving the loans.
Fake loan network built on forged documents
The investigation further revealed that the accused had systematically created forged documents and used them to obtain loan approvals. In several instances, similar or identical documents were used across multiple loan accounts, pointing to a well-organized fraud.
The case clearly exposed collusion between bank officials and private individuals, who exploited systemic loopholes to execute the fraud.
A warning for the banking sector
The case highlights serious lapses in internal controls and verification mechanisms within the banking system. The court’s verdict is being seen as a strong message to financial institutions against negligence and collusion in loan disbursal processes.
Experts believe that banks must strengthen their risk management frameworks and internal audit systems to prevent such frauds in the future and ensure greater accountability.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
