Follow Us:
Tuesday, October 26, 2021

Karnataka’s SGRSBN co-operative bank scam: Rs 1,480 crore siphoned, 60% deposited to 24 accounts as loans

SGRSBN bank scam (Karnataka): As of July 9, the Sri Guru Raghavendra Sahakara Bank Niyamitha (SGRSBN) is liable to pay Rs 2,073 crore and Rs 375 crore as interest to 994 fixed deposit holders.

Written by Kiran Parashar | Bengaluru |
Updated: September 25, 2021 4:51:20 pm
Customers gathered in front of the Sri Guru Raghavendra Sahakara Bank in Nettakallappa circle, Basavanagudi, Bengaluru (Express Photo: Darshan Devaiah BP/File)

An audit of the Sri Guru Raghavendra Sahakara Bank Niyamitha (SGRSBN) in Bengaluru — where depositors have been defrauded — has revealed that Rs 1,480 crore has been misappropriated and about Rs 890 crore or 60 per cent was given as loans to 24 accounts, the Karnataka assembly was informed on Monday.

In a response to a question raised by BJP MLA Ravi Subramanya, the department of co-operatives said, “in the audit report which has been shared with the government in the first week of September, it was revealed that the bank had a loss of Rs 1,923 crore of which Rs 1,480 crores were misappropriated.”

The documents show that a staggering loan of Rs 890 crore was released to 24 beneficiaries which is part of misappropriation.

As of July 9, the bank is liable to pay Rs 2,073 crore and Rs 375 crore as an interest to 994 fixed deposit holders.

In January last year, the Reserve Bank of India (RBI) imposed a withdrawal limit of Rs 35,000 citing the bank’s bad loans. The ceiling was raised to Rs 1 lakh later.

A source in the bank said that they are yet to submit a conclusive report to the government but a huge amount of money has been swindled.

While the bank heads had earlier tried to downplay the fraud saying they would recover the money, documents show that as on January 10, 2020, the bank’s total loan outstanding amount was Rs 1,567 crore and by 31 August 2021, only Rs 182 crore was recovered.

There are about 35,000 depositors at this co-operative bank where many people – a large chunk are senior citizens from south Bengaluru – have deposited their lifetime savings.

The Criminal Investigation Department (CID) which conducted an investigation has been able to find a total of 9,548 accounts related to bank’s board members and other accused involved where Rs 15 crore has been deposited. The accounts have been frozen.

The CID till date has named 37 accused including the head and directors of the bank where 11 persons are out on bail and four have died. The association of depositors, when contacted, said atleast 60 depositors have died.

While the Union Cabinet in July cleared changes to the deposit insurance laws to provide funds up to Rs 5 lakh to an account holder within 90 days in the event of a bank coming under the moratorium imposed by the RBI.

However, in the response placed in the state legislature, the cooperatives department has said that depositors with severe health issues can be given Rs 5 lakh with RBI’s permission.

Apart from the depositors at the Guru Raghavendra bank, about 3,500 depositors of Sri Guru Sarvabhauma Souharda Credit Co-operative Society, a sister concern of the bank, are also in trouble.

According to a report dated June 7, 2021 submitted by the society’s administrator to the high court, it shows that about Rs 284 crorewas siphoned off from the society to adjust the same towards bad loans of the bank.

A source in the society says that technically, the society is a customer/depositor of the Guru Raghavendra bank and the 3,500 depositors with the society will also have to be given Rs five lakh as relief due to the sinking of the bank.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Bangalore News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard