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Indian Bank’s Hit with One of the Largest Scams in History
Suman Vijay Gupta, the chairman of the privately held Ushdev International Ltd (UIL), a firm with its headquarters in Mumbai, has been charged with defrauding the State Bank of India (SBI) of Rs 3,300 crore. Due to the situation, Gupta, a citizen of the Dominican Republic, was prohibited from entering the United Arab Emirates (UAE). The Bombay High Court’s decision to permit Gupta to leave India on the condition that he provide a private undertaking to return and face legal procedures there was appealed by the SBI to the Supreme Court.
The SBI was given permission by the Supreme Court to react to Gupta’s response on March 16. The Bombay High Court’s ruling permitting Gupta to travel abroad was also suspended by the court. The SBI said that Gupta acquired Dominican Republic citizenship following the designation of her account as a Non-Performing Asset (NPA).
One of the largest banking scams in Indian history occurred in this case. A Rs 3,300 crore loan given to Ushdev International Ltd by the SBI in 2013 is allegedly the subject of the fraud. According to reports, the loan was increased to allow the company to buy coal from Indonesia. The SBI designated the account as an NPA in 2015 since the debt was not returned.
Extradition Laws Questioned in Indian Economic Crimes
The case has also called into question how well extradition laws and procedures deal with economically motivated criminals who depart the country. Concerns regarding the capacity of law enforcement organizations to prosecute economic offenders are raised by Gupta’s citizenship in the Dominican Republic and her attempt to enter the UAE despite the fact that her case is still ongoing.
The extradition of Mehul Choksi and Nirav Modi, who both oppose extradition from foreign nations, has likewise been a drawn-out and challenging process. To make sure that economic perpetrators cannot dodge prosecution by leaving the nation, the administration may need to reassess and tighten its extradition laws and procedures.
Following that, the SBI filed a lawsuit against the firm and its directors. The company and its directors were charged with fraud, criminal conspiracy, and forgery after the bank lodged a complaint with the Central Bureau of Investigation (CBI).
Nirav Modi & Mehul Choksi Contest Extradition
Gupta and the other accused have been pleading for an end to their detention and travel limitations during the course of the case’s lengthy legal proceedings. The CBI filed a chargesheet in 2019 against the defendants in the case, which also included Gupta and her husband.
The incident is one of many high-profile banking frauds that have occurred in India recently. According to the Punjab National Bank (PNB), jeweler Nirav Modi and his uncle Mehul Choksi allegedly committed a $2 billion scam in 2018. Modi and Choksi are still contesting their extradition from the UK and Dominica, respectively, while the matter is still pending.
According to experts, weak regulations and insufficient loan disbursement oversight are to blame for an increase in banking scams in India. According to a Reserve Bank of India (RBI) study from 2019, banks in India recorded over 6,800 fraud instances between April 2013 and March 2019, totaling Rs 71,500 crore.
Tightening Banking Regulations in India
The RBI has responded by implementing a number of steps to tighten regulations and monitor banks. A framework for handling loan fraud was created by the central bank in 2019 and involves early fraud detection, reporting, and investigation.
In order to address the problem of financial scams, the government has also taken action. The Fugitive Economic Offenders Act, which permits the seizure of assets from anyone who escapes the nation to avoid being charged with economic crimes, was passed in 2018.
One of the largest banking frauds in Indian history involved Suman Vijay Gupta and Ushdev International Limited. The case emphasizes the requirement for stricter laws and increased bank supervision in order to stop such fraudulent activities in the future. A step towards upholding the law in the case was taken by the Supreme Court in its decision to let the SBI contest Gupta’s travel and overturn the Bombay High Court’s ruling. Yet it’s still unclear how the case will develop and whether the accused will be prosecuted.
Read More: CBI Arrests Videocon Group Chairman Venugopal Dhoot in ICICI Loan Fraud Case
