DHFL scam

The DHFL scam, also known as the Dewan Housing Finance Corporation loan fraud, is a major financial scandal in India involving the diversion of bank loans and money laundering by the promoters of Dewan Housing Finance Corporation. As promoters, Kapil Wadhawan, Dheeraj Wadhawan and others obtained about ₹42,871 crore (US$4.5 billion) in loans from a consortium of 17 banks between 2010 and 2018. And, a large part of it was diverted through false accounting, fictitious retail loans and related companies, causing an estimated loss of about to the lenders.

In 2022, the Central Bureau of Investigation registered a case following a complaint by Union Bank of India, while the Enforcement Directorate is investigating the alleged money laundering. The Reserve Bank of India took control of DHFL's board in 2019 after the company defaulted on payments. DHFL later entered insolvency proceedings and was acquired by the Piramal Group in 2021. Criminal and money-laundering proceedings against the former promoters and others are ongoing.

Overview

Rajesh Kumar Wadhawan incorporated DHFL in 1984 as a housing finance company. It grew into one of India's largest private housing finance companies, raising substantial wholesale funding from banks and the capital markets while reporting a large retail-loan book.

The fraud came into the light during India's non-banking finance sector crisis after 2018. In January 2019, the investigative portal Cobrapost alleged diversion of funds through shell companies; DHFL denied the claims. Later, forensic accounting work by Grant Thornton and consequent agency probes revealed that DHFL used fictitious "Bandra Book" retail loan accounts to hide payments to promoter-linked entities. Investigators also alleged that internal software created fake or split small home loans to make large transfers appear as normal housing loans.

Investigation and timeline According to the CBI complaint and subsequent ED chargesheets, a consortium led by UBI sanctioned loans and credit facilities of about ₹42,871 crore to DHFL. Investigators alleged that around ₹11,500–11,755 crore was routed to 87 "Bandra Book" entities with little or no independent business, many linked to the promoters. Fictitious or recycled borrower data were allegedly used to present these transfers as retail home loans. Some of the funds were used for purchasing personal and group asset which includes paintings, jewellery, an aviation-company stake and overseas property, while company records were altered to conceal the transactions and support further borrowing.

The alleged irregularities came to wider public attention during the financial problems affecting India's non-banking finance sector after 2018. In June 2019, DHFL defaulted on its debt obligations, causing a sharp fall in its share price and regulatory intervention. In October 2019, the ED searched DHFL offices and properties linked to its promoters as part of a money-laundering investigation. The probe also examined DHFL loans linked to companies associated with properties connected to Iqbal Mirchi. On 20 November 2019, the RBI removed DHFL's board.

In January 2020, promoter Kapil Wadhawan was arrested by the ED under the PMLA in connection with the investigation. He was later granted bail. The ED also investigated transactions involving Yes Bank and DHFL, including about ₹3,700 crore in debentures.

On 24 March 2021, the CBI filed a case against DHFL and its promoters over allegations that about 260,000 fictitious home-loan accounts were created under the Pradhan Mantri Awas Yojana. The CBI alleged that fake loans worth ₹14,046 crore were created, with about ₹11,755.79 crore allegedly routed to shell companies In January 2025, CBI closed the investigation after it could not establish a criminal conspiracy.

In September 2025, the ED attached DHFL-related assets worth ₹186 crore in connection with a bank-fraud investigation.

In December 2025, the Supreme Court of India granted bail to the Wadhawan brothers in the CBI case.

DHFL scam

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