Six Individuals Face FIR in Rs 1.35 Crore PMEGP Loan Fraud Case at Bhavnagar Bank
In a significant development, the Nilambaug police station in Rajkot has officially registered a First Information Report (FIR) against six individuals, comprising four loan beneficiaries and two bank agents, in connection with a substantial fraud amounting to Rs 1.35 crore at a nationalised bank located in Bhavnagar. This case highlights serious allegations of financial misconduct involving government-backed schemes.
Complaint Details and Alleged Conspiracy
The complaint was formally lodged by Kalpesh, who serves as the assistant general manager of the affected bank. According to the filed documents, the accused parties are alleged to have conspired to divert funds that were sanctioned under the Prime Minister's Employment Generation Programme (PMEGP). This government scheme is specifically designed to provide crucial financial support for small business startups, aiming to foster entrepreneurship and economic growth.
The four borrowers identified in the FIR are Bhumi Pandya, Kiran Rathod, Jalpa Shah, and Jagruti Lalwani. They are accused of colluding with two bank agents, Bharat Advani and Sunil Haseja, to execute the fraudulent activities. The modus operandi involved submitting fake bills and documentation to secure term loans and cash credit facilities from the bank.
Misuse of Funds and Discovery of Fraud
Investigations reveal that the sanctioned funds were reportedly not utilized for their intended purposes, such as purchasing machinery or stocking inventory, as falsely claimed in the loan applications. Instead, the money was allegedly diverted for unauthorized uses, leading to a breach of trust and financial loss for the bank.
The fraud came to light when the borrowers defaulted on their repayment obligations. Subsequent surprise inspections conducted at the designated business premises uncovered a complete absence of the promised machinery and stock. As a result, the loan accounts deteriorated into non-performing assets (NPAs) between February and October 2025, signaling severe financial distress and mismanagement.
Legal Charges and Ongoing Investigation
The FIR has been registered under multiple sections of the Bharatiya Nyaya Sanhita (BNS), including sections 318 (4), 336 (2), 336 (3), 338, 340 (2), and 61 (2). These charges pertain to various offenses related to fraud, conspiracy, and financial misconduct, underscoring the gravity of the case. Authorities are actively investigating the matter to uncover further details and ensure accountability.
This incident raises concerns about the integrity of loan disbursement processes under government schemes and highlights the need for stricter oversight to prevent similar frauds in the future. The banking sector and law enforcement agencies are urged to enhance vigilance to protect public funds and support genuine entrepreneurs.
