What Is Profile Funding?

Profile Funding is a sophisticated real-estate and banking fraud primarily orchestrated by builders in collusion with agents and, in some cases, banks. It targets individuals with a strong salary profile and high CIBIL score, exposing them to severe civil and criminal consequences without their informed consent.

How the Profile Funding Scam Operates

A real estate agent persuades a financially sound individual (referred to as the borrower) to purchase a flat in the builder’s project and obtain a housing loan in their own name, promising “No EMI till possession” along with a commission. Borrowers are assured that loan will be closed in 6 months and they will get huge profit.  

Profile funding scam is also known as “profile lending”, “profile financing,” “profile loan builder,” and “bank scam.” 

Most borrowers who get trapped in scam of Profile Funding work in the private sector like IT professionals, software engineers, fintech employees amongst others. These professionals have decent credit scores, regular salary deposits, and a clean financial history.

In many cases:

  • Multiple housing loans (sometimes up to 9) are taken in the name of a single borrower by booking flats in multiple projects of different builders.
  • All loans are sanctioned within 10–15 days, ensuring they do not reflect immediately in CIBIL or PAN records.
  • This enables the builder to secures cheap housing finance instead of expensive business loans.
  • The borrower is promised a commission ranging from ₹50,000 to ₹20 lakhs, which is at times not paid.

Fake Down Payments & Manipulated Documentation

To satisfy lending norms:

  • Builders issue forged down-payment receipts falsely stating that 10–15% of the flat value has been paid by the borrower.
  • In some cases, money is temporarily routed through the borrower’s account (or deposited in cash) and immediately returned to the builder to fabricate a payment trail.
  • These acts involve forgery, misrepresentation, and money laundering tactics.

Illegal Loan Disbursement Practices​

Despite Reserve Bank of India (RBI) and National Housing Bank guidelines requiring disbursement of loan as per stages of construction of the building,

  • Banks disburse 90 to 100% of the loan amount upfront.
  • Borrowers are made to sign blank or pre-typed consent letters requesting 100% disbursal of the loan amount directly to the builder.
  • Multiple blank signed cheques are collected at the time of sanction.

The EMI Trap & Credit Damage

Initially:

  • EMIs are paid by the builder to maintain appearances.
  • Later, builders deliberately stop paying 2 EMI’s and pay third EMI to avoid NPA classification.

Eventually:

  • EMIs stop completely.
  • Borrowers start receiving recovery calls, legal notices, and visits from the recovery agents at their homes and/or offices.
  • Calls/Email’s to seniors in office
  • CIBIL scores collapse silently.
  • ECS and cheque bounces cases are filed by the banks against the borrowers. The same is also reflected in CIBIL report in form of “Suit Filed”
  • Banks file cases for recovery of loan amount with compound interest and penalty against the borrower before the Hon’ble Debt Recovery Tribunal.
  • If such recovery cases are not contested by the borrowers of if the borrower has changed the address, such cases are decided against the borrower. After this, bank files execution before DRT, in which the salary account will be attached through details retrieved from PAN. If amount is still not paid, such borrower can be arrested and imprisoned until the dues of banks are cleared.
  • In many cases the builder becomes such a big defaulter they end up in insolvency proceedings before Hon’ble National Company Law Tribunal.
  • The long-term effects of profile funding on CIBIL score are such that once, CIBIL score goes down a lot. Victims can’t apply for:
  •  Home loans
  • Vehicle loans
  • Credit cards
  • Business loans
  • Personal loans
  • If the employer checks credit history (especially for people working in stock exchange, finance), you may not be able to get the job.

Harassment Through Distant Litigation

Banks often file recovery and cheque-bounce cases in jurisdictions which are far from the borrower’s residence, purely to exhaust them financially and mentally.

Dual Funding – An Aggravated Criminal Offence

In several cases, builders resell the same flat to a second buyer without clearing the original loan.
This results in:

  • Two legal owners for one property
  • Two different banks having mortgage over one flat
  • Clear offences of cheating, criminal breach of trust, and conspiracy

Legal Consequences Faced by Victims

Civil Consequences

  • EMI defaults and recovery proceedings
  • Severe CIBIL score damage
  • Cheque bounce cases under Section 138, NI Act
  • SARFAESI actions and attachment threats
  • Recovery cases filed by banks against borrowers before Debt Recovery Tribunals or through Arbitration.

Criminal Exposure (Often Unknown to Victims)

Banks may initiate FIRs alleging:

  • Multiple loans obtained within a short period
  • Forged salary slips or income documents
  • Cheating, forgery, and criminal conspiracy

A Critical Legal Warning for Victims

Victims of profile funding fraud must not:

  • Admit participation in profile funding before banks, police, or courts
  • Narrate the complete factual sequence without legal protection

An incorrect statement can trigger criminal liability against the borrower.

The Correct Legal Strategy to Counter Profile Funding Fraud

Handling profile funding cases requires a carefully structured, legally sustainable approach.

Handling profile funding cases requires a carefully structured, legally sustainable approach.

Consumer Court Proceedings

Consumer Courts provide broader jurisdiction and stronger enforcement

Reliefs typically include:

  • Refund of illegally disbursed loan amounts
  • Compensation for mental harassment
  • Litigation costs
  • Stay on banks from demanding/recovering EMI of loan amount from borrower

RERA

Reliefs typically include:

  • Refund of illegally disbursed loan amounts
  • Compensation for mental harassment
  • Litigation costs

Constitutional Remedy (Writ Petition)

Another step is filing a Writ Petition before the High Court or Supreme Court, seeking:

  • Immediate stay on coercive recovery actions
  • Protection from EMI enforcement

Courts have consistently granted relief where:

  • Loans were disbursed in a single tranche
  • Construction-linked disbursement norms were violated
  • RBI / NHB guidelines were ignored

Criminal Proceedings Against Builders (Case-Specific)

Where evidence supports:

  • Multiple sale of the same unit
  • Forged allotment letters
  • Fraudulent approvals

Criminal complaints can be initiated against builders alone, with extreme caution and legal vetting.

Builders & Projects Identified in Profile Funding Cases

  • Aban Desire and their projects
  • Ozone Projects (Bangalore and Chennai)
  • Cubatic Shimul
  • Associate Buildwell, Castle Green
  • Ozone Urbana, Aqua and Metrozone
  • Godrej Summit (Sector-104, Gurgaon)
  • Rudra Buildwell – KB KNOWS
  • Suvastu Homes- Bangalore
  • Magic Info Solutions
  • Landstar Homes- Pinnacle
  • Sri Vani Shelters, Bangalore
  • Kaveri Infrastructure, Noida
  • Shree Vardhman Developer – Gardenia, Sonipat
  • Parkwood Developers, Mohali & Gurgaon Project
  • Supertech (multiple projects including Eco Village, North Eye, UP Country)
  • Parth gardenia
  • Kings square
  • Sanghvi Builders
  • Terra Group, Alwar
  • EMMVEE Infrastructure, Meerut
  • Mahagun India P. Ltd.
  • Migsun
  • AVJ Developers
  • Shubhkamna Buildtech
  • Manju J Homes
  • Idea Developers
  • APV Reality Limited
  • JSS Buildcon
  • Nikhil Woodland & Kunal Structural, Agra
  • Divyansh Onyx
  • Raheja Developers
  • Nikhil Home Associates (Nikhil Park Royale), Agra
  • Masscon India, Ghaziabad
  • Morpheus Builder
  • Yazdan Construction
  • CHD Builder
  • Sikka
  • Supercity Myfair
  • RPS Auria
  • Idea Builders
  • Future Estate, Futureworld Green Homes, Greater Noida
  • Rhythm County, Future World Green Homes, Greater Noida (West)
  • Antriksh Golf View, Sector-78, Noida
  • Shivalika, Tushar Real Homes, Jaipur
  • DSS Builtech (Silvergades) Melia
  • M3M Broadway
  • TDI Infrastructure
  • Avalon Gardens, Bhiwadi, Rajasthan
  • Sunshine Solaris Project, M/s Golfgreen Residency Pvt. Ltd., Noida
  • Himalaya Pride, Greater Noida (West)
  • Mulberry Mist, M/s CMRS Infrastructure Pvt. Ltd., Bangalore
  • Krish City-II, Alwar
  • Sapthagiri Vasundhara, Vasundhara Builders, Bangalore
  • Ajnara Ambrosia, Noida
  • Splendor Grande, Sector-19, Panipat
  • Officer City, Ghaziabad, Proview Infra Pvt. Ltd.
  • Marina Suites, Ghaziabad, Skyhigh Infra
  • Johari Construction
  • Nivasti Developers LLP. …and many more.

Our Expertise

We have successfully represented over 3,000 victims of profile funding and builder fraud across India.

Our litigation strategy has:

  • Been tested across multiple High Courts
  • Consistently secured protection for homebuyers
  • Withstood challenges from banks and builders

Expert legal intervention is not optional — it is essential.

Why a Legally Sustainable Narrative Matters

Profile funding cases intersect:

  • Banking law 
  • Criminal law
  • Consumer protection
  • Constitutional remedies

A single misstep can permanently damage the borrower’s case.