SBI Faces ₹5.5 Crore Personal Loan Scam in Gujarat: Fake Salary Slips, Bogus Docs, and Bank Officials Involved

India’s largest public sector bank, the State Bank of India (SBI), has fallen victim to a massive ₹5.5 crore personal loan scam. The fraud, unearthed in Gujarat's Dahod district, involved the use of fake salary slips, forged documents, and unauthorized loan approvals. What makes the scam alarming is the alleged involvement of government employees, two former SBI managers, and middlemen. The breach was discovered during an internal audit, raising serious concerns about document verification and internal banking processes.

The ₹5.5 Crore Loan Scam: What Happened?

According to a report by The Times of India, the fraud occurred at two SBI branches in Dahod — Yadgaar Chowk Main Branch and Station Road Branch. A total of 29 individuals were found to have secured personal loans using fake documents and false identities.

Key findings:

• 29 loan applicants submitted forged salary slips and employment details to receive loans.

• Of these, 17 were actual government employees who inflated their salaries on paper.

• The remaining 10 applicants posed as government employees using entirely fake documents.

• The total loan disbursed under false pretense: ₹5.5 crore.

An internal audit revealed that the loans were approved without proper verification, raising questions about lapses in SBI’s risk assessment and due diligence procedures.

Who Is Involved?

Investigations so far have uncovered the involvement of:

• Two former SBI branch managers, both of whom have been arrested.

• Middlemen or agents, believed to have facilitated the fake documentation process and lured applicants into the scam.

• A network of fraudsters, some of whom were public sector employees using their credentials to manipulate the system.

The scam was meticulously planned to exploit personal loan eligibility norms. Banks usually offer personal loans up to 20 times an applicant's monthly salary. To qualify for higher loan amounts, fraudsters falsified salary statements to show inflated income figures.

How the Scam Exploited Loan Norms

Here’s how the fraudulent loan approvals worked:

• Let’s say the monthly salary of an applicant is ₹50,000. Based on this, they could be eligible for a personal loan of up to ₹10 lakh.

• To push this limit, many applicants submitted salary slips showing double or triple their actual income.

• Since the bank didn’t verify the slips thoroughly, the loans got approved and disbursed.

What You Should NEVER Do While Applying for a Loan

In light of this incident, here are important tips every loan applicant should follow to avoid legal trouble and financial risks:

✅ Use Only Authentic Documents

Always submit genuine income proof, employment letters, and identity documents. Using fake documents is a criminal offense and can lead to serious legal consequences.

🚫 Avoid Middlemen or Agents

Never rely on unauthorized agents or brokers to get your loan approved. These intermediaries may manipulate the process unethically and charge hefty commissions, risking your financial credibility.

📉 Don’t Overstretch Your Borrowing Limit

While banks may offer loans up to 20 times your monthly salary, only borrow what you can repay comfortably. Excessive loans can lead to repayment delays, penalties, and stress.

📊 Watch Your Credit Score

A loan may be approved, but if you fail to repay it on time, it will impact your credit score negatively, potentially blacklisting your financial profile for future credit approvals.

Conclusion: A Wake-Up Call for Borrowers and Banks Alike

The ₹5.5 crore loan scam at SBI is not just a banking scandal—it’s a warning for borrowers to stay within legal boundaries and for banks to tighten verification protocols. It highlights the vulnerabilities in loan processing systems and underscores the importance of due diligence and ethical borrowing. With investigations underway and arrests already made, more names may emerge in the coming days.