ED Cracks SBI Car Loan Fraud, Seizes BMWs, Mercedes and Land Rovers From Borrowers

In a major crackdown on bank fraud, the Enforcement Directorate (ED) on Friday revealed that a former State Bank of India (SBI) branch manager colluded with loan agents and borrowers to sanction high-value car loans worth several crores using forged documents, leading to the purchase of luxury vehicles, including BMW, Mercedes, Volvo, and Land Rover models. The ED’s Mumbai Zonal Office conducted raids on November 25-26 at 12 locations across Pune, targeting borrowers, car dealers, and the residence of ex-SBI Chief Manager Amar Kulkarni.

Investigations, triggered by CBI FIRs and complaints from Shivajinagar Police, found that Kulkarni, posted at SBI’s University Road branch between 2017 and 2019, allegedly abused his position by approving loans without proper verification. Borrowers submitted fake income proofs, inflated quotations, and forged identity documents to secure loans far exceeding their actual repayment capacity. In many cases, the excess sanctioned amount was siphoned off as “margin money” or kickbacks.

During the searches, the ED seized incriminating documents, digital evidence, and several high-end vehicles purchased with the fraudulent loans. Immovable properties acquired with diverted funds were also identified. The agency invoked Section 17 of the Prevention of Money Laundering Act to freeze assets and seize luxury cars found at the borrowers’ premises.

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ED sources said the scam followed a classic pattern: loan counsellor Aditya Sethia allegedly acted as the middleman, bringing borrowers who were willing to pay hefty commissions. Kulkarni, in turn, bypassed due diligence and internal lending norms to fast-track approvals. Many borrowers defaulted soon after taking possession of the vehicles, leaving SBI with massive NPAs.

The case highlights a growing trend of organized fraud in vehicle financing, where bank insiders collude with agents and customers to generate black money through inflated loan disbursals. The ED is now expanding its probe to trace the ultimate beneficiaries of the siphoned funds and additional properties purchased with the illicit proceeds.

With luxury car loans becoming a favored route for money laundering, the agency has warned banks to tighten KYC and quotation verification processes. Further arrests are likely as the money trail unravels.

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