Builder-Financial institutions nexus: CBI raids 77 sites in 8 States

The CBI on Tuesday conducted searches at 77 locations across eight states after registering 22 new cases in connection with builders-financial institutions nexus case. The searches were spread across Delhi, Chennai, Puducherry, Bengaluru among other locations, officials said. "The cases relate to an alleged nexus between certain builders and officials of financial institutions, leading to the cheating and defrauding of innocent homebuyers," a Central Bureau of Investigation (CBI) spokesperson said in a statement.
“These coordinated search operations, conducted across different states, are part of a nationwide crackdown. The searches have resulted in the seizure of incriminating documents, digital devices, and other materials, which are currently being examined,” said a senior CBI official. The official added that the action aims to gather crucial evidence to unravel a larger conspiracy involving the alleged diversion of funds, financial irregularities, and fraudulent practices in the housing real estate sector.
It may be recalled that the CBI had earlier registered 28 cases against various builders in compliance with the Supreme Court’s directions, which are now in the final stages of investigation. With these, the CBI has registered a total of 50 cases so far following the Supreme Court’s directions. In April 2025, the Supreme Court ordered a CBI probe following over 170 petitions filed by more than 1,200 homebuyers, who alleged that banks had disbursed large loans to builders under subvention schemes even before projects had commenced. After developers defaulted, banks began demanding equated monthly instalments (EMIs) from the homebuyers to recover the loan amounts.
Subvention schemes typically involve a tripartite agreement between the buyer, the bank and the developer. Under these arrangements, buyers pay between 5% and 20% upfront, while banks disburse the remaining loan amount to the developer in stages. The developer is expected to service the interest on the loan for a fixed period, usually two to four years, until possession is handed over, after which the buyer begins repaying the loan through EMIs.

(Freelance Journalist)