ED attaches properties worth Rs 114.19 crore of defaulter borrowers of Sri Guru Raghavendra Sahakara Bank Niyamitha

Earlier, the ED had attached movable and immovable properties belonging to the accused persons valuing to Rs 45.33 crore and the same was confirmed by the competent authority. The ED has also arrested four persons in the case, including the then president of the bank.

The ED initiated an investigation under the PMLA in the year 2020 based on an FIR registered under various sections of the IPC and Karnataka Protection of Interest Depositors in Financial Establishments Act, 2004 filed by the Bengaluru police against various defaulter borrowers of the bank.

During the investigation under PMLA, the ED said, “It is revealed that the defaulter borrowers in connivance with the management and employees of the bank have taken 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.”

It added, “The bank promised to give a higher interest rate to the depositors which was not in 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.

The borrowers who have taken the loans without giving adequate security, did not repay the same and the loans became 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 a strong financial health of the bank to lure more depositors.”

In 2020, the RBI had imposed withdrawal restrictions on the SGRSBN. The probe revealed that more than Rs 2,500 crore were misappropriated by the bank management, including the loss that the bank incurred.