Top 10 Financial Frauds in India That Made Headlines

In a country where people think twice before spending, the scams and frauds not only break the trust of people but also leave a deep wound in the dreams of billions of people. 

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India's past has many stories where money was lost due to bank regulation, fraud and betrayal.

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Scams not only make a deep impact on the trust of honest taxpayers but also shake up investor trust.

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From political scams to significant bank and financial frauds, India has witnessed a wide array of massive money scams. 

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Each scam you are about to read didn't just make headlines, but shook the nation and gave us a strong message of why financial awareness and secure savings matter more than ever.

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10 Biggest Scams in India That Shook the Nation

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1. Harshad Mehta Scam (1992)

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Amount Involved: ₹4000 crore (approx.)

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People Involved: Harshad Mehta, popularly known as the Big Bull of the Indian stock market. 

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Case Brief: This affair was one of the most famous stock market scams. Harshad Mehta manipulated the stock market with forged bank receipts, fake liquidity and loopholes in the banking system. 

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He forged BRs to raise massive capital from banks, and at that time, there was a loophole in the banks' system of verifying the securities. 

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He artificially inflated the stock price of certain stocks by flooding them with investment. The stock market experienced a dramatic crash when the scam came to light.

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Impact: Millions of Indians lost their hard-earned savings, and their trust in the system was deeply shaken. 

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Reforms: Following this scam, the National Stock Exchange (NSE) came into existence, and SEBI assumed control over both the NSE and NSDL. SEBI’s powers were enhanced, and surveillance systems were improved.

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Check out our deep dive into Harshad Mehta’s net worth.

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2. Vijay Mallya Loan Default Scam (2012-2016)

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Amount Involved: ₹9000 Crore

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People Involved – Vijay Mallya, owner of Kingfisher Airlines and United Breweries Group

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Case Brief: The Vijay Mallya case became one of India’s most talked-about bank scams, where massive loans were granted to fund the failing Kingfisher Airlines.

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Despite mounting losses, banks continued lending without proper checks. When the airline collapsed, Mallya fled India in 2016, leaving behind unpaid dues. Investigations later exposed fund diversion, false financials, and serious flaws in lending oversight.

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The scam had two major impacts: firstly, it caused significant losses to public sector banks, which receive funding from taxpayers. And secondly, the case exposed systemic loopholes in high-value lending.

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Reforms: Introduction of Insolvency and Bankruptcy Code (IBC), 2016.

3. Satyam Scam (2009)

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Amount Involved: ₹7000 Crores

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People Involved: Ramalinga Raju, Founder & Chairman of Satyam Computers

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Case Brief: The Satyam scam was India’s largest corporate fraud and is often referred to as “India’s Enron”. 

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The scam was exposed when the chairman confessed to forging the book of accounts and inflating profits over the years to attract investors. They created fake documents to deceive investors and regulators.

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Impact: It was an eye-opener for regulators and called for strict corporate governance laws. The stock market crashed, and people lost billions of rupees.

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Reform: The corporate governance framework underwent several reforms, including the repeal of the Companies Act of 1956 and the introduction of the Companies Act of 2013. 

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4. 2G Spectrum Scam (2008)

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Amount Involved: ₹1.76 lakh Crores

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People Involved: Top politicians (telecom minister) in the government and others.

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Case Brief: The 2G spectrum scam was one of the most infamous scandals in Indian history, often cited as a major Congress party scam. 

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It involved the underpricing and irregular allocation of 2G spectrum licenses. Telecom licenses were handed out at significantly lower prices to select companies without a transparent auction process, leading to massive financial losses for the Government of India.

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‍Impact: There were two major impacts from the scam: firstly, it was a major dent in public trust in government institutions, and secondly, the Supreme Court eventually cancelled all telecom licenses.

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Reform: Auction-based spectrum allocation introduced.

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5. Commonwealth Games Scam (2010)

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Amount Involved: ₹70,000 Crore

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People Involved: Suresh Kalmadi (CWG Organising Committee Chairman) and other officials.

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Case Brief: The Commonwealth Games, meant to be a source of national pride, unfortunately turned into a major money scam that tarnished India’s global image. 

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The scandal involved inflated contracts, some marked up by as much as 400%, along with embezzlement of funds and a serious lack of transparency in spending.

The impact of the scandal led to national embarrassment and significantly damaged India’s ability to host major events.

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Reforms: Creation of the Public Procurement Bill and a stronger focus on audit trails of public funds.

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Stay alert about all the latest financial scams in 2025.

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6. Coalgate Scam (2012)

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Amount Involved: Estimated loss of ₹1.86 Lakh Crore (CAG Report)

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People Involved – UPA Government officials, the coal ministry, and private companies.

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Case Brief: The Coalgate scam involved the allocation of coal blocks to private companies by the Indian government without a transparent and competitive bidding process. 

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Many of the companies received the allocations at lower prices. As a result of the incident, the government suffered enormous notional losses.

Impact: There were two major impacts from the scam: firstly, the Supreme Court later cancelled 214 coal block allocations, and secondly, it caused a significant reduction in foreign investment at that time.

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Reform: Coal block allocation moved to an auction model.

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7. Bofors Scam (1986)

Amount Involved: A ₹1437 crore deal for 155 mm howitzers from Sweden’s Bofors AB.

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People Involved:  Alleged involvement of top Indian politicians and Swedish arms manufacturer Bofors AB

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Case Brief: It was one of the most infamous Indian political scams. A defence deal of ₹1,437 crore was signed between the Indian government and Sweden’s arms manufacturer Bofors AB for howitzers. 

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The political scam was exposed by a Swedish radio channel, revealing that a bribe of ₹64 crore was paid to top officials to secure the defence contract. The case also involved allegations against top politicians.

Impact: The incident led to the downfall of Rajiv Gandhi's government and significantly damaged India's reputation in defence procurement.

Reform: Led to a ban on middlemen in defence deals, which is still prevalent.

8. Sahara Scam (2010)

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Amount Involved: ₹24000 Crore 

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People Involved: Subrata Roy and Sahara India Pariwar

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Case Brief: In 2011, the Securities and Exchange Board of India (SEBI) uncovered that the Sahara Group had raised ₹24,000 crores from crores of investors through optionally fully convertible bonds without SEBI’s approval. 

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This large-scale financial fraud involved collecting money in cash, with no clear investor records, making the whole system nearly untraceable. 

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SEBI ruled the fundraising method illegal and asked Sahara to refund the amount—a directive they failed to follow, turning it into a significant bank fraud case in India’s financial history.

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Impact: The two major impacts of the scam were, firstly, that it raised serious concerns about shadow banking, and secondly, that the Supreme Court intervened and Subrata Roy was arrested.

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Reform: SEBI’s powers were expanded to safeguard the interests of small investors.

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9. Nirav Modi PNB Scam (2018)

Amount Involved: ₹14000 crores

People Involved: Nirav Modi & Mehul Choksi

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Case Brief: Most high-profile letters, where fake Letters of Undertaking (LoUs) were issued by Punjab National Bank, enabled Nirav Modi to get massive credit from Indian banks overseas. 

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These LOUs were issued without any collateral or proper records. Punjab National Bank's failure to repay the debts exposed the bank scam, making it one of the largest in India's banking history.

Impact: There were two major impacts from the scam: firstly, it resulted in a loss of public trust in PSU banks, and secondly, PNB stock and the entire Bank Nifty crashed.

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Reform: RBI tightened the LoU rules immediately.

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10. Online Scams and Online Frauds (Ongoing)

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Amount Involved: ₹1,400+ Crore (RBI data)

People Involved: Scammers using phishing, fake apps, QR codes, and impersonation.

Case Brief: With the boom in digital transactions, fraudsters use deceptive SMS links, screen mirroring apps, fake customer support, and scam QR codes to steal money directly from people’s bank accounts and UPI apps.

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Impact: Millions of innocent Indians are affected by these frauds every month.

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How to avoid online scams?

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• Always verify before investing.
• Stay alert for fake promises of “guaranteed high returns.”
• Don’t share OTPs or PINs.
• Track your investments and savings regularly.

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Download the Jar app and save money in digital gold securely.

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