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Subvention Scheme Fraud In a significant move to crack down on real estate fraud, the Central Bureau of Investigation (CBI) has registered 22 FIRs against prominent builders in the National Capital Region (NCR). These cases pertain to a massive Subvention Scheme fraud in which thousands of innocent homebuyers were allegedly deceived through illegal loan practices in collaboration with financial institutions.
Massive Operation Targets Builders and Bank Officials
The CBI launched coordinated search operations across 47 locations, including Delhi, Gurugram, Noida, Greater Noida, and Ghaziabad. During these raids, the agency seized incriminating documents and digital evidence, highlighting a widespread network of builder-financier collusion under fraudulent subvention loan schemes.
This action follows multiple complaints from homebuyers, who alleged they were misled into risky financial agreements under the false promise of delayed EMI or “No EMI till possession” schemes.
Supreme Court’s Intervention and Timeline
H3: SLPs Filed by Homebuyers
The case gained traction after Special Leave Petitions (SLPs) were filed in the Supreme Court. These petitions accused financial institutions of taking coercive recovery steps, even when subvention terms were still in force.
CBI Begins Preliminary Investigation
Acting on the Court’s directive, the CBI initiated seven preliminary enquiries in April 2025. Within just three months, six of these were completed, and a detailed status report was submitted to the apex court.
H3: Registration of 22 Regular Cases
Based on the CBI’s findings, the Supreme Court ordered the registration of 22 regular FIRs against various builders and unidentified financial institution officials for their role in the subvention scam.
What Is the Subvention Scheme Fraud?
The subvention scheme was designed to ease home loan burdens during the construction phase. However, many builders allegedly stopped paying EMIs mid-way, pushing the burden onto unsuspecting buyers. The CBI’s report exposes how builders collaborated with banks to mislead buyers by hiding loan disbursement clauses and project delays.
Implications for the Real Estate and Finance Sector
This large-scale investigation is likely to reshape real estate regulations and increase financial scrutiny in home loan disbursement. Key outcomes may include:
Stricter monitoring of loan-based housing schemes
Improved transparency in builder-financer agreements
Consumer protection reforms for vulnerable homebuyers
The investigation is still ongoing, and further arrests and disclosures are expected in the coming weeks.
In a sweeping move, India’s Central Bureau of Investigation (CBI) has registered 22 FIRs against a host of real estate developers and unidentified financial institution officials for allegedly conniving to cheat homebuyers under the much‑misused Subvention Scheme. The crackdown, spearheaded by a Supreme Court directive, marks a pivotal moment in the fight against systemic fraud in the housing sector.The Economic TimesBusiness StandardMoneylifeThe Indian Express
What Went Down
Initially, the Supreme Court took cognizance of grievances from over 1,200 homebuyers, who had filed Special Leave Petitions (SLPs), complaining that they were coerced into paying EMIs despite not taking possession of their flats.The Indian ExpressThe Economic Times
In response, the Court directed the CBI in April 2025 to launch seven Preliminary Enquiries (PEs). The agency completed six of these within three months, paving the way for the registration of 22 full-fledged FIRs against developers and unnamed officials linked to financial institutions.India TodayThe Indian ExpressMoneylifeThe New Indian Express
Extensive Raid Operations
Simultaneously, CBI executed coordinated raids at 47 locations spread across Delhi, Gurugram, Noida, Greater Noida, and Ghaziabad. Seized during these operations were a trove of incriminating documents and digital evidence that underpin the agency’s case.India TodayBusiness StandardThe New Indian Express
Who’s in the CBI’s Crosshairs?
The FIRs name a wide array of high-profile developers, many operating marquee projects across the NCR. Notable among those listed are:
Supertech Ltd
Jaypee Infratech / Jaypee Sports International
Vatika Ltd
Ajnara India Ltd
Geotech Promoters, Earthcon Universal, Bulland Buildtech, Shubhkamna Buildtech, Logix City Developers, Dream Procon, Sequel Buildcon, Idea Builders, Manju J Homes, and others.Business StandardDynamite NewsMoneylife
Equally significant is the inclusion of major banks and housing finance institutions—SBI, HDFC, ICICI, Indiabulls HFC, PNB HFC, Tata Capital Housing Finance, Piramal Finance, among others—allegedly complicit via the Subvention Scheme.The Economic TimesLaw ChakraBusiness Standard
The Fraud Under the Lens
At its core, the Subvention Scheme promised that builders would make EMI payments on behalf of homebuyers until property possession. However, once builders began defaulting—while projects remained incomplete—banks began recovering EMIs from buyers, placing them in a precarious financial position despite no delivery as promised.Law ChakraMoneylifeThe Times of India
Investigations hint at a widespread deception: banks allegedly disbursed 70–80% of sanctioned loans to builders without verifying construction progress, directly violating Reserve Bank of India (RBI) norms.MoneylifeThe Times of IndiaLaw Chakra
What’s Next
The scale of this Court‑monitored probe is unprecedented in recent NCR real estate history. The CBI has already examined over 1,000 individuals, visited 58 project sites, and continues to dig deeper—especially focused on the seventh PE, which pertains to builder-projects outside the NCR.The Indian ExpressDeccan Chronicle
Regulatory bodies like RERA, RBI, and NHB are expected to play supportive roles, providing timely data and assisting in reviewing the legality of the tripartite agreements under scrutiny.The Times of India+1
Why This Matters
Justice for Homebuyers: For thousands of buyers left stuck in limbo—paying for undelivered homes—this probe offers a crucial chance for redress.
Enforcing Accountability: Developers and bankers enticing buyers into flawed contractual schemes are now under legal scrutiny.
Upholding Financial Integrity: The probe underscores the need for stricter regulation and due diligence in loan disbursement tied to construction milestones.
Final Thought
As the investigation unfolds, aspiring homeowners and industry watchers alike will be closely monitoring how the CBI maneuvers through complex developer-bank collusion. Whether this leads to convictions, restitution, or systemic reform, one thing is clear: the era of unchecked subvention-based home financing in the NCR may be coming to an end.
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