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Tuesday, September 21, 2021

4 arrested for loan scam in Kerala co-operative bank

Officials of CPM-controlled bank created fake accounts, siphoned off over Rs 104 cr

Written by Shaju Philip | Thiruvananthapuram |
July 26, 2021 3:46:14 am
The government has also dissolved the bank's governing body, run by CPI(M) for the past 40 years, and brought it under the administrator.

KERALA POLICE’S economic offences wing on Sunday arrested four functionaries of a CPI(M)-controlled co-operative bank in Thrissur district, where a loan scam of at least Rs 104 crore was detected last week.

The arrested include the secretary, manager, chief accountant and a commission agent of Karuvannur Co-operative Bank.

The police also conducted searches at the premises of those arrested as well as at properties of two absconding staff of the Karuvannur-based bank, and seized documents pertaining to the illegal loans. All the accused are CPI (M) members, who were sacked from the party after the scam was unearthed on July 19.

The opposition Congress and BJP, which have targeted the ruling party in the state over the issue, have alleged that the loan scam is to the tune of Rs 300 crore. State Cooperation Minister V N Vasavan, however, said that an internal inquiry has revealed financial fraud of Rs 104.37 crore.

The government has also dissolved the bank’s governing body, run by CPI(M) for the past 40 years, and brought it under the administrator.

Vasavan said there was no lapse on the part of the government. “When the anomalies came to notice, we suspended the officials concerned and ordered a probe. Civil and criminal proceedings have been initiated. We have nothing to hide,” he said.

According to the minister, the accused diverted the loans to accounts created in fake addresses and manipulations in the banking software. Those behind the fraud would be brought to book, he said.

The accused bank functionaries allegedly siphoned off crores of rupees to a few companies, including two tourism ventures, which failed to take off during the lockdown. The accused were themselves promoters of the projects.

In one instance, sources said, more than 100 loan accounts were allegedly created under fictitious names and Rs 50 lakh each were credited to the accounts. It is suspected that accused bank staff forged the addresses and documents to pocket Rs 50 crore in this manner. Many daily wage workers, who had applied for bank loans, never got the amount credited in their accounts, but got recovery notices for defaulting on loan repayment.

In such dealings, the bank did not go for any collateral, the sources said.

In some cases, loans were sanctioned to even those who had not applied for it. The ceiling on loans at the cooperative bank was flouted to allot huge amounts to benami accounts of the bank officials and local CPI(M) leaders, it is alleged.

BJP state secretary N Nagesh said the bank allotted huge loans illegally without ensuring collateral security. “There were middlemen at the bank to facilitate loans. For huge loans, these middlemen pocketed 10 per cent of the amount as commission. Persons who never applied for loans have been allotted Rs 50 lakh each. The bank officials created fake addresses and accounts to loot the money,” he alleged.

According to data available, the cooperative bank has a deposit of Rs 358 crore and a credit of Rs 320 crore. A CPI(M) branch committee member, K K Divakaran, has been the bank president for the past 10 years.

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