The SREI Infrastructure Finance Collapse
An auditor flagged ₹13,110 crore in transactions as fraudulent at one lender alone. The RBI dissolved the board, a bank sold the loans to a national asset company, and years later, banks are still filing fresh fraud reports on what's left.
The Promise
“SREI Infrastructure Finance and SREI Equipment Finance will be operated in accordance with RBI governance norms, without evergreening loans or fraudulent transactions.”
— SREI Infrastructure Finance Ltd. and SREI Equipment Finance Ltd. (SEFL), under their former promoters, Non-bank financial companies specialising in infrastructure and equipment financing · 1 January 2020
Both companies faced RBI board supersession in October 2021 over governance lapses and evergreening practices, before entering insolvency resolution.
The Standard
Lending and account management conducted in line with RBI governance norms, without loans being rolled over or renewed simply to avoid classifying them as bad debt.
RBI prudential and governance norms for non-bank financial companies.
In force from 1 January 2020
The Reality
A transaction auditor (BDO India) reported to the insolvency administrator that transactions worth ₹13,110 crore at SREI Equipment Finance were fraudulent under Section 66 of the Insolvency and Bankruptcy Code. The National Asset Reconstruction Company Ltd. (NARCL) acquired both SREI entities in December 2023 following resolution under the Insolvency and Bankruptcy Code. Separately, Punjab National Bank has continued to flag fresh fraud amounts linked to SREI's former promoters to the RBI as recently as 2026, with one report citing ₹2,434 crore.
As of 1 January 2026
The Gap
Bars share a single zero-based scale. No axis truncation is used to exaggerate or minimize the gap between the two figures.
Timeline
- StatusRBI initiates special audit
Regulatory scrutiny of SREI's finances intensifies.
- StatusRBI supersedes both boards
The central bank cites governance lapses and evergreening practices.
- StatusAuditor flags ₹13,110 crore as fraudulent
BDO India's transaction audit report is submitted to the insolvency administrator.
- StatusNARCL acquires both entities
Resolution under the IBC concludes with NARCL taking over SREI Infrastructure and SREI Equipment Finance.
- StatusPNB flags fresh fraud to RBI
The bank reports a ₹2,434 crore loan fraud linked to SREI's former promoters, having already fully provisioned for the loss.
Legal Status
This is a stub entry. The RBI's supersession of both boards and the auditor's fraud finding are official, confirmed actions. This investigation has not yet established whether any individual former promoter or executive has faced criminal prosecution or conviction.
Verdict
Preliminary verdict, pending fuller research: regulatory intervention and an auditor's formal fraud finding under insolvency law are both confirmed, official actions — stronger than a mere allegation. This investigation has not yet established whether any individual has faced criminal charges over the flagged transactions.
The RBI's board supersession and the auditor's report are documented regulatory and insolvency-process facts, not contested allegations. Confidence is not higher because this investigation has not traced any resulting individual criminal case to a conclusion.
What remains incomplete
- This is a stub entry. Whether any individual former promoter or executive faces separate criminal proceedings over the flagged transactions has not been established.
- The full relationship between the ₹13,110 crore auditor finding and PNB's separate, more recent ₹2,434 crore fraud report has not been reconciled.
- The extent of loss ultimately borne by lenders after NARCL's acquisition has not been quantified in this entry.
Sources
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