Cooperative Bank Money Laundering Case: ED Attaches Rs 114 Crore Worth Of Assets

The Enforcement Directorate (ED) on Tuesday said it has attached assets worth more than Rs 114 crore as part of its money laundering probe against defaulters of a Karnataka-based cooperative bank who are alleged to have misappropriated Rs 800 crore funds.

"The attached properties are in the form of 21 immovable assets consisting vacant lands, residential houses, commercial and industrial buildings and movable properties in the form of bank balance of Rs 3.15 crore," the agency said in a statement.

The action has been taken against various defaulters of Sri Guru Raghavendra Sahakara Bank Niyamitha in Bengaluru, it said.

The total value of the assets attached under the Prevention of Money Laundering Act is Rs 114.19 crore.

The money laundering case of 2020 stems from an FIR filed by the Bengaluru Police against the defaulters and the promoters of the bank.

The probe found, the ED said, defaulter borrowers in connivance with the management and employees of the bank took huge loans from the bank on the basis of bogus deposits and fake fixed deposits and "siphoned off" the money deposited by the public with the bank.

The bank promised to give higher interest rate to the depositors which was not in the line with the prevailing market rate. Most of the depositors of the bank are senior citizens who have deposited their retirement funds with the bank for their financial security in their dotage which was advanced to various persons by the bank "without" obtaining proper security of the loans, it said.

The ED found that the borrowers who have taken the loans without giving adequate security did not repay the same and the loans become overdue. 

"The bank management created fictitious loan accounts and transferred the money to these accounts which in turn was transferred to overdue loan accounts for evergreening purposes to show strong financial health of the bank to lure more depositors," it said.

The agency had earlier attached assets worth Rs 45.33 crore in this case earlier and had arrested four persons that included the former President of the bank K Ramakrishna.