While everyone is familiar with names like Harshad Mehta and Vijay Mallya when it comes to the biggest financial scams in India, it may shock you that they are not the only ones. 

The buzz around financial frauds in India is at its peak fever pitch right now, with Netflix’s Bad Boy Billionaires and Scam 1992. Everyone enjoys a good rags-to-riches story and especially when it has something to do with the scandal.

As the country is tightening its grip over the economy due to the pandemic, everyone is scared about the future of India. On that note, let’s revisit some of the greatest financial scams in India that duped the country of billions of dollars. With corruption being common in the country, there have been many people who have taken advantage of the financial foundation of the nation’s economy for years. Here are 5 of the most gripping stories about financial scams in India. 

5 Greatest Banking Scams in India 

From Vijay Mallya to Harshad Mehta, these are some of the biggest financial frauds in India:

1. Vijay Mallya Scam of 2017

The Vijay Mallya scam is known as the top financial scam of India. Once known as the “king of good times”, Vijay Mallya, the liquor baron of India is responsible for one of the biggest financial frauds in India. He single-handedly duped the country of almost 9000 crore rupees. While there was a time when the people of India revered him as the “king of good times”, those good times are far behind him today.

In 2016, Vijay Mallya made headlines as he escaped from India and sought refuge in the UK when he was accused of money laundering and financial fraud in the country. Currently, he owes the country billions in different banks which he had borrowed as a loan for his business Kingfisher airlines. He has been officially declared a fugitive economic offender.

The Indian government is trying its best to repatriate Vijay Mallya from the UK, but it doesn’t seem to happen anytime soon. Meanwhile, Vijay Mallya has appealed to Nirmala Sitharaman to consider his offer of paying back the money he laundered from the country.

2. The Ketan Parekh Scam of 2001

An apprentice and ardent follower of Harshad Mehta, Ketan Parekh is responsible for yet another one of the biggest financial scams in India. A chartered account, Ketan Parekh used to obtain funds from banks and in return, artificially infiltrate stock prices in Bombay, Allahabad, and Kolkata Stock Exchange. Known as the Bombay Bull, Ketan Parekh even had his own titled stocks called K-10 stocks. His good days ended in 2001 with the Sensex crash, he was investigated and found guilty of rigging. Since then, he has been banned from the Indian stock exchange market. Ketan Parekh is guilty of defrauding MMBC and Bol of rupees 1030 crores and 137 crores respectively. 

3. The Nirav Modi PNB Scam of 2018

Another bad boy billionaire responsible for one of the biggest banking scams in India is Nirav Modi. Known as one of the most controversial financial frauds to ever take place in India, this financial scam took place through the Punjab National Bank. 

Nirav Modi along with his uncle Mehul Choksi and two other Punjab National bank directors were involved in the PNB fraud. In 2018, the Punjab National Bank accused Nirav Modi of obtaining Letters of Undertaking (LoUs) from the Punjab National Bank without clearing the margin amount against loans. This meant that if Nirav Modi’s companies failed to pay the loan, the bank was responsible for filling the debt. 

4. The Saradha Scam of 2013

Another major financial scam in India, the Saradha scam bagged an amount of 1200-4000 crore rupees. The Saradha scam robbed poor people of their money. The Saradha Group was a chit fund company with a consortium of over 200 other private companies. A sort of Ponzi scheme, what is most disappointing about the Saradha scam is that the poor people were robbed off of all they had while the mastermind fraudster got away with an extremely short jail sentence. Sudipta Sen, the mind behind one of the greatest financial scams of India who was also the chairman of the Saradha Group tried to abscond but was arrested in 2013. 

This banking fraud shook the people of Bengal to its crore as many lost all their property and assets to the Saradha Group. Currently, Sudipta Sen is lodged in Kolkata’s Presidency Jail and has lodged a “prisoner’s petition” to the offices of the Prime Minister and Mamata Banerjee who is the Chief Minister of West Bengal. 

5. The Coalgate Scam of 2012

The coal allocation scam of India, popularly known as the Coalgate scam is one of the most controversial financial scams in India. This banking scam in India which led to a political scandal surfaced around the early 2010s, specifically in 2012 when the UPA government was in power. The Coalgate scam was brought to public notice by the Comptroller and Auditor General (CAG) when they assertively accused the government of locating around 194 blocks of coal illegally in a span of 5 years, that is, between 2004 and 2009. 

As we said, the Coalgate scam in India is one of the most major political scandals as it accused the government’s involvement in allocating the nation’s coal reserves. The Coalgate scam shook the country to the core as it involved some of the most influential political bureaucrats, ministers, and politicians. When the CBI investigated the matter, it resulted in massive public outrage and media reaction. Political leader Hansraj Ahir even publicly protested the government’s handling of the nation’s coal reserves and demanded the immediate resignation of the Prime Minister. 

Even though the Comptroller and Auditor General initially estimated the financial fraud loss to be around 10 lakh rupees, the official final report mentioned that the scam amount was Rs. 186 lakh crore (approximately). In all these banking scams in India, the general pattern noticed is that of the poor and the less fortunate losing out on tons of money as the fraudsters are dismissed with short jail sentences. This raises serious concerns about corruption in the country. 

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