Madhya Pradesh Excise Department Shifts To E-Bank Guarantees After Fake FDR Scams, Tightens Liquor Shop Licence Process

Bhopal (Madhya Pradesh): Following several cases of fake and fabricated fixed deposit receipts (FDRs) being used to obtain liquor shop licences, the state excise department has shifted to e-bank guarantees to prevent such fraud, officials said.

Excise commissioner Deepak Saxena said the new system would prevent duplication of deposits and help the department avoid legal complications.

The state of Madhya Pradesh is the first in India to use e-bank guarantees for participating in the tender process for liquor shops, starting from the financial year 2025-26. This ensures that there is no duplication of deposited amounts,” said Saxena.

Recently, the OSD to the deputy chief minister was suspended for permitting a contractor to submit fake and fabricated bank guarantees of Rs 2.76 crore in 2024-25, and this is not the first case for the department.

In the state, cases have been registered against officials and contractors with the Economic Offences Wing (EOW) and also with the Enforcement Directorate (ED).

It is claimed that very few cases of cheating involving the department come to light. But in actuality, a large number of cases took place during the contract procedure and never came to the fore because a large number of state excise officials are allegedly involved.

Rs 49 crore scam

In 2025, the Enforcement Directorate (ED) carried out raids on liquor contractors across the state as part of its probe into a fake challan excise scam. Raids were conducted in Indore, Bhopal and Mandsaur.

The agency seized Rs 7.44 crore in cash, froze Rs 71 lakh in bank accounts and sealed several bank lockers.

Objectionable documents and property papers worth crores were also recovered. The scam is linked to fake treasury challans and illegal liquor licences, with suspected losses to the government of over Rs 49 crore.

Rs 56 crore scam

In 2020, a scam was exposed in which contractors had submitted fake FDRs of more than Rs 56 crore over the past four years. They converted papers showing 'Rs 7,000 FDR' into 'Rs 70 lakh'. The scam surfaced in Indore and Jabalpur.