On the basis of the Prevention of Money Laundering Act, 2002, the Directorate of Enforcement (ED) arrested Amar Sadhuram Mulchandani, Ex-Chairman of Seva Vikas Co-operative Bank, on July 1, 2023. The arrest is connected to the ongoing investigation into the Seva Vikas Co-operative Bank fraud case, in which the bank lost Rs 429 crore due to 124 non-performing loan accounts. As a result, the bank went insolvent, forcing thousands of small depositors to lose money.
The ED launched a probe based on various FIRs filed in Pune against Amar Mulchandani, the bank’s ex-chairman, as well as its directors/officials and loan defaulters. Amar Mulchandani ran the bank like a family business, according to the investigation. Amar Mulchandani treated public deposits in the bank as his personal fiefdom, violating all prudent banking norms in order to illegally sanction loans to his preferred borrowers in an arbitrary manner, without checking their creditworthiness or providing adequate collateral securities, and after accepting bribes of up to 20% of the sanctioned loan amounts.
He appointed his family members as Directors in the bank with the explicit intention of obtaining a veto-proof majority on the Board of Directors to issue loans according to his whims and fancies. More than 92% of the loan accounts had become delinquent, resulting in the bank’s demise. The RBI has cancelled the bank’s licence. Following his arrest and appearance before the Hon’ble Court of Mumbai, he was sent to ED custody for 6 days, till July 7, 2023.
Previously, properties worth Rs 122.35 crore were provisionally attached in this case, including benami assets belonging to Amar Sadhuram Mulchandani. The situation is currently being investigated further.
