Under the Prevention of Money Laundering Act, 2002, the ED has temporarily attached assets worth Rs.114.19 Crore belonging to different defaulter borrowers of Sri Guru Raghavendra Sahakara Bank Niyamitha in connection with the misappropriation of public deposits worth more than Rs.800 Crore. The connected assets consist of 21 immovable properties, including empty lands, residential residences, commercial and industrial structures, and a bank balance of Rs.3.15 crore.
Previously, the ED had attached movable and immovable properties worth Rs.45.33 crore belonging to the accused parties, which was verified by the relevant authorities. The ED has also detained four people in the investigation, including the Sri Guru Raghavendra Sahakara bank’s former president. In the year 2020, the ED launched an inquiry under the PMLA based on an FIR filed by Bengaluru Police under different sections of the IPC, 1860, and the Karnataka Protection of Interest Depositors in Financial Establishments Act, 2004 against several defaulter borrowers of the bank.
During the PMLA investigation, it was discovered that defaulter borrowers, in collusion with the bank’s management and personnel, obtained large loans from the bank on the basis of phoney deposits and false Fixed Deposits and syphoned off the money placed by the public with the bank. The bank pledged to provide greater interest rates to depositors, which were not in accordance with the market rate.
The majority of the bank’s depositors are older individuals who have put their retirement assets with the bank for financial security in their dotage, which the bank loaned to other people without acquiring appropriate collateral for the loans. Borrowers who took out loans without providing enough security did not repay them, and the debts were past due.
The bank’s management constructed bogus loan accounts and moved funds to these accounts, which were then transferred to delinquent loan accounts for evergreening reasons in order to demonstrate the bank’s robust financial health in order to attract more depositors. Further research is being conducted.
