Banker's dillema

What is my fault in it.

Seniors screw juniors. Everyone is going to blame me . I can not sleep in nights. Thoughts of all kinds come to mind.

If you have collected the margin money and sent Account payee demand draft to the manufacturer and sent the same by Regd post.  Your duty ends there.

If only they can establish malafide intentions of hand in glove with manufacturer /supplier then only they can fix responsibility.

Your immediate duty is to report the matter to your higher authorities without any delay.  Every PSU may be having branches all over India.  Explain the happening to one of your colleague at manufacturer's place and ask him to trace the manufacturer.

These types of frauds are existing from the start of Banking in India and abroad.  Every Manager before retirement might have come across similar instances.  Many of these things happen between manufacturer and borrower.

It is the responsibility of buyer, and as per his instructions and as per quotation, Bank has acted as his agent and remitted the money.

Borrower is responsible.  Though the new generation bankers (from 1990) do not agree with CCC concept of borrowers, it is a time tested principle.  (Character, capital and capacity of the borrower).  Due to these type of frauds, the most enterprising manager becomes a shy person, becomes orthodox, and it reflects in each and every action in his personal and professional dealings.  He becomes suspicious.  It depends on the support of superiors as a smart superior can handle the situation very tactfully.  

How you can come to conclusion that you shall lose job just because one loan the security is not created! Even most successful Banker shall be having a healthy percentage of around 60 to 80% loans being good, most of them crop loan renewals and running account OD renewals.

In your case, if there is any questionable practice adopted by you in disbursing the loan, you can be punished with an explanation letter.  First be sincere to yourself and ask yourself whether you have done your duty correctly and at each stage you have recorded the facts with documentary evidence wherever required and reporting is done to your higher ups, honestly without favour or fear. If answer is yes, nothing will happen to you.

This kind of questions are not for this forum. There is nothing legal about your question.

The client should sit with the manufacturer and get the machine.  It is his responsiblity, since (1) He selected the manufacturer (2) He asked the bank to pay the manufacturer.  Bankers do not have any responsibility in this.  If the loan is not repaid, the bank can take legal action for recovery