5 Biggest Scams in India: India has seen some of the biggest financial scams globally, including stock market fraud, banking scams, and Ponzi schemes. Such high-profile scams have led to enormous economic losses, damaged investor confidence, and exposed widespread corruption and regulatory failures. In this blog, we reveal the top 5 largest scams in India, worth thousands of crores each, and examine their impact on the Indian financial system.
Here are 5 Biggest Scams in India
1. Satyam Computers Scam – ₹7,000 Crore
The Satyam Computers scam of 2009 was one of the most infamous instances of corporate fraud in India. Ramalinga Raju, the chairman and founder of Satyam, admitted to exaggerating company revenues, profits, and cash balances over a few years.
Key Highlights:
Year of Scam: 2009
Scam Amount: ₹7,000 Crore
Accused: Ramalinga Raju
Sector: Information Technology, Corporate Governance
Impact: Investor confidence broken; resulted in more stringent norms by SEBI and new corporate auditing standards.
This scam is frequently referred to as “India’s Enron”, a testament to its international notoriety.
2. Ketan Parekh Scam – ₹40,000 Crore
The Ketan Parekh scam in 2001 rocked the Indian stock market. Ketan, a former Chartered Accountant and stockbroker, manipulated the prices of shares through illegal tactics, bank resources, and circular trading methods.
Key Highlights:
Year of Scam: 2001
Scam Amount: ₹40,000 Crore
Accused: Ketan Parekh
Sector: Banking, Stock Market
Impact: Caused a stock market crash and led to the downfall of small-cap firms.
He was famous for building the “K-10 stocks” portfolio, which subsequently crashed, erasing crores of investor wealth.
3. Harshad Mehta Scam – ₹5,000 Crore
Evidently referred to as the “Big Bull of Dalal Street,” Harshad Mehta’s 1992 scam revealed loopholes in India’s banking and stock market systems. He abused bank receipts and channeled ₹5,000 crore into the stock market.
Key Highlights:
Year of Scam: 1992
Scam Amount: ₹5,000 Crore
Accused: Harshad Mehta
Sector: Banking, Stock Market
Impact: Initiated stock market reforms, the creation of SEBI as a regulator, and strict RBI surveillance.
This fraud became extremely popular after it was depicted in the web series “Scam 1992”.
4. Nirav Modi & PNB Scam – ₹11,000 Crore
Billionaire jeweler Nirav Modi in 2018 masterminded one of India’s biggest banking scams through fake Letters of Undertaking (LoUs) from Punjab National Bank (PNB). He fraudulently withdrew money to fund his high-end jewelry business across the globe.
Key Highlights:
Year of Scam: 2018
Scam Amount: ₹11,000 Crore
Accused: Nirav Modi, Mehul Choksi
Sector: Banking, Jewellery
Impact: Initiated a massive shake-up in Indian banking procedures and resulted in international arrest warrants.
This scandal prompted critical examination of SWIFT systems, risk management, and interbank transactions in India.
5. Saradha Group Chit Fund Scam – ₹2,500 Crore
Saradha chit fund scam was uncovered in 2013 and entailed more than 1.7 million small investors in West Bengal and its adjacent states. The Ponzi scheme guaranteed fake returns but imploded, rendering the investors bankrupt.
Key Highlights:
Year of Scam: 2013
Scam Amount: ₹2,500 Crore
Accused: Sudipta Sen
Sector: Chit Fund, Ponzi Scheme
Impact: Exposed regulatory loopholes in non-banking financial companies (NBFIs); resulted in political turmoil.
The scam also had a major socio-political fallout, with some political leaders and celebrities being probed.
These five giant scams are not only financial fraud; they are cautionary tales of the risks of uncontrolled power, loopholes in regulation, and the imperative of transparency in India’s financial markets. As India continues on its economic rise, enhancing accountability, auditing, and corporate governance must be the top priority.
