CBI Nabs Two in ₹183 Crore Fake Bank Guarantee Scam Tied to Madhya Pradesh Projects

 

CBI Nabs Two in ₹183 Crore Fake Bank Guarantee Scam

Overview of the Fraud

In a major crackdown that has shaken the administrative corridors of several states, the Central Bureau of Investigation (CBI) has unearthed a massive scam involving fake bank guarantees worth ₹183 crore. The fraud was used to secure public infrastructure contracts, especially irrigation projects in Madhya Pradesh.

Role of CBI in the Operation

The CBI swung into action after receiving directives from the Madhya Pradesh High Court. Following an intense investigation, the agency filed three separate FIRs on May 9, 2025, setting the wheels in motion for what would become a major operation across five states.

Companies and Contracts Involved

At the heart of the fraud was Teerth Gopicon Ltd., an Indore-based construction company. In 2023, this firm secured three major irrigation contracts from Madhya Pradesh Jal Nigam Limited (MPJNL) totaling a whopping ₹974 crore. But to bag these contracts, they allegedly submitted eight forged bank guarantees worth ₹183.21 crore.

The Key Arrests Made

Who is Govind Chandra Hansda?

Govind Chandra Hansda was a senior manager at Punjab National Bank (PNB). His position gave him direct access to sensitive banking infrastructure and procedures. His arrest has sent shockwaves within banking circles, raising questions about internal control mechanisms.

Who is Mohammed Firoz Khan?

Kolkata-based Mohammed Firoz Khan, reportedly linked with a network of fake guarantee facilitators, was also arrested. Together with Hansda, he’s suspected to be a crucial cog in an inter-state gang dealing in counterfeit bank documents.

Modus Operandi of the Scam

Fake Bank Guarantees Submitted

The fraudulent guarantees, meant to look authentic, were submitted to MPJNL as part of contract documentation. These fake guarantees essentially assured the government that PNB would pay in case of project default—a critical requirement for bagging large public works.

Fraudulent Emails Impersonating PNB

The most chilling aspect was the email impersonation. MPJNL received confirmation emails that mimicked PNB’s official domain, falsely validating the authenticity of the guarantees. These deceptive tactics gave the appearance of due diligence and fooled officials into proceeding.

How MPJNL Was Misled

Based on the fake confirmations, MPJNL approved and awarded the three contracts to Teerth Gopicon Ltd. Without these guarantees, the company would not have qualified under normal financial scrutiny.

Scale and Reach of the Scam

Multi-State Operation

This was not a localised operation. Raids were conducted across New Delhi, West Bengal, Gujarat, Jharkhand, and Madhya Pradesh—a clear indication that the scam had deep roots and national ambitions.

Syndicate from Kolkata

Initial investigations suggest that the nerve centre of the entire operation was Kolkata. A well-organised syndicate from the city allegedly specialised in creating forged financial documents to win government tenders.

Legal Action and Future Course

Transit Remand and Further Investigation

Both accused were produced in a Kolkata court and are now being brought to Indore on transit remand. The CBI has confirmed that further arrests and discoveries are likely as the investigation deepens.

High Court’s Role in Triggering the CBI Probe

This investigation stems from judicial intervention. The Madhya Pradesh High Court ordered the probe after irregularities were flagged by MPJNL, reflecting how judiciary-led oversight can play a key role in ensuring transparency.

Lessons for Government Agencies

Need for Stronger Verification Systems

The scam underscores a pressing need to tighten verification protocols, especially while dealing with financial instruments like bank guarantees. Blind reliance on email confirmations is a ticking time bomb.

Cybersecurity in Public Procurement

The use of fake email domains also reveals vulnerabilities in government cyber hygiene. Adoption of secure, encrypted communication and centralized verification platforms is no longer optional—it's essential.

Conclusion

This ₹183 crore bank guarantee scam isn’t just about fake documents—it’s about trust being broken in public systems. While the CBI’s swift action has plugged one leak, it highlights how a combination of financial forgery and tech exploitation can bring even large government institutions to their knees. Stronger mechanisms, better training, and digital vigilance are the way forward.

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FAQs

1. What is a bank guarantee and why is it important in government contracts?
A bank guarantee is a financial promise that the bank will pay if the contractor fails to deliver. It’s a safety net for government projects to ensure compliance and accountability.

2. How did MPJNL get fooled by the fake bank guarantees?
MPJNL received fake email confirmations that appeared to come from PNB, which misled them into believing the guarantees were real.

3. What action did the Madhya Pradesh High Court take?
The court directed the CBI to investigate after irregularities were noticed in the contract documentation and verification process.

4. Who are the key people arrested in the scam?
Govind Chandra Hansda, a PNB manager, and Mohammed Firoz Khan from Kolkata were arrested for their central roles in the scam.

5. How can such scams be prevented in the future?
Using centralized verification systems, secure email protocols, and periodic audits can help detect and prevent such fraudulent activities.