Chennai CBI court jails 8 for 10 years in ₹1.97 crore SBI dairy loan fraud
Synopsis
A CBI court in Chennai has handed 10-year jail terms to eight people — including two former SBI branch officials — for orchestrating a scheme of 728 forged dairy loans that cost the bank nearly ₹2 crore. The verdict, over 13 years in the making, is a rare instance of insider banking fraud reaching full conviction with stiff monetary penalties.
Key Takeaways
A CBI special court in Chennai sentenced eight persons to 10 years of rigorous imprisonment on 31 July .
Convicted officials include former SBI Branch Manager N.
Gopalakrishnan and Rural Marketing Officer P.
Balamurali of the Chengam branch .
The fraud involved 728 fraudulent dairy loans worth ₹2.33 crore , causing a wrongful loss of ₹1,97,27,692 to SBI.
Fines of ₹50 lakh each were imposed on five convicts; the remaining three were fined ₹20 lakh each .
The CBI had registered the case in September 2011 ; two of the original 10 accused died before the verdict.
A Central Bureau of Investigation (CBI) special court in Chennai has sentenced eight persons — including two former State Bank of India (SBI) officials — to 10 years of rigorous imprisonment each in a bank fraud case involving 728 fraudulent dairy loans and a wrongful loss of ₹1,97,27,692 to the bank. The verdict was delivered on 31 July, concluding a trial that stretched over more than a decade.
Who Was Convicted
The two former SBI officials sentenced are N. Gopalakrishnan, then Branch Manager of the Chengam branch, and P. Balamurali, then Rural Marketing and Recovery Officer. Six private individuals — R. Venkataraman, S. Ravi, D. Sankar, R. Rajan, P. Pannerselvam, and T. Murugan — were also found guilty and sentenced to the same term.
The court imposed fines of ₹50 lakh each on Gopalakrishnan, Balamurali, Venkataraman, Ravi, and Sankar. Rajan, Pannerselvam, and Murugan were each ordered to pay ₹20 lakh.
How the Fraud Was Carried Out
The fraud took place between October 2007 and May 2008, during which 728 dairy loans totalling ₹2.33 crore were sanctioned through SBI's Chengam branch. According to the prosecution, fraudulent and forged applications and loan documents were submitted in the names of purported borrowers to obtain the funds.
Investigators found that the bank officials had allegedly conspired with K. Purushothaman, proprietor of Kanthamma Milk Chilling Plant in Chengam taluk, under a tripartite arrangement involving the milk chilling plant. Prescribed pre-sanction and post-sanction procedures for dairy loans were not followed, according to the CBI's findings.
The Long Road to Conviction
The CBI registered the case on 23 September 2011, following a complaint from the Regional Manager of SBI's Region-V in Chengalpet. A chargesheet against 10 accused was filed on 25 June 2013, and the trial court framed charges on 1 May 2016.
Two of the original accused — Purushothaman and former SBI Deputy Manager (Advances) K. Ravichandran — died during the pendency of the trial, and charges against them were accordingly abated. The remaining eight faced trial and were ultimately convicted on the basis of prosecution evidence.
Significance of the Verdict
The case underscores the systemic risk posed by insider collusion in public sector bank lending, particularly in rural credit schemes where verification of borrower credentials can be lax. This conviction comes at a time when banking regulators and enforcement agencies have intensified scrutiny of loan fraud involving government-linked financial institutions. The decade-plus timeline from registration to sentencing also reflects the pace at which complex financial crime cases move through India's court system.
With all eight convictions upheld and substantial monetary penalties imposed, the judgment signals that CBI courts are willing to hand down significant punitive measures in white-collar banking fraud cases.
Point of View
Where branch-level bank officials used their position to legitimise forged documents at scale across 728 loans. Public sector banks remain vulnerable to exactly this kind of collusion, where rural credit schemes with minimal oversight become conduits for systematic fraud. The 13-year gap between the offence and sentencing is itself a story: it reveals how long financial crime victims — in this case, SBI and its depositors — wait for accountability. With banking fraud cases rising, the CBI's conviction rate in such matters will be closely watched by both regulators and future accused.
NationPress
1 Aug 2026
Frequently Asked Questions
What was the Chennai CBI court dairy loan fraud case about?
The case involved 728 fraudulent dairy loans worth ₹2.33 crore sanctioned through SBI's Chengam branch between October 2007 and May 2008, using forged applications and documents. The fraud caused a wrongful loss of ₹1,97,27,692 to SBI, according to the prosecution.
Who were the SBI officials convicted in the Chennai fraud case?
The two former SBI officials convicted are N. Gopalakrishnan, then Branch Manager of the Chengam branch, and P. Balamurali, then Rural Marketing and Recovery Officer. Both were sentenced to 10 years of rigorous imprisonment and fined ₹50 lakh each.
When was the CBI case registered and how long did the trial take?
The CBI registered the case on 23 September 2011 following a complaint from SBI's Regional Manager in Chengalpet. A chargesheet was filed in June 2013, charges were framed in May 2016, and the verdict was delivered on 31 July — more than 13 years after the case was registered.
What penalties were imposed on the convicted persons?
All eight convicts received 10 years of rigorous imprisonment. Five of them — Gopalakrishnan, Balamurali, Venkataraman, Ravi, and Sankar — were fined ₹50 lakh each, while Rajan, Pannerselvam, and Murugan were fined ₹20 lakh each.
What happened to the other accused in the case?
Two of the original 10 accused — K. Purushothaman, proprietor of Kanthamma Milk Chilling Plant, and former SBI Deputy Manager K. Ravichandran — died during the trial. Charges against them were abated, and the remaining eight faced conviction.
