The Rural Development and Panchayat Raj (RDPR) department on Thursday suspended three officials for unauthorisedly parking Rs 55 crore in bank accounts that were reportedly misused.

Two of them are from the Karnataka Rural Infrastructure Development Limited (KRIDL) - Chief Finance Officer-1 Veeranagouda Patil and Deputy Finance Officer Prashant Kumar MV - with the third officer being RDPR Finance Superintendent Shankarachari.

A preliminary investigation found that the trio was responsible for opening a fixed deposit at the Kulai (Mangaluru) branch of the Indian Overseas Bank (IOB). The KRIDL Investment Committee resolved to deposit Rs 20 crore at IOB first on August 24 and another Rs 35 crore on August 30, this year.

Alarm bells rang when it was found that Rs 50 lakh from this deposit was transferred to the account of Shah Exports in the Koramangala branch of Vijaya Bank. Apparently, this account had a zero balance for the past two years.

An internal probe concluded that choosing a faraway branch of IOB to make a deposit was not right. Interestingly, the probe found that of the two fixed deposit certificates issued by IOB, one had an old address of KRIDL whereas the other had no address at all. Lastly, the probe found that "some cheaters" had created fake KRIDL documents and transferred money to various accounts.

The IOB general manager informed authorities that the bank had neither issued a fixed deposit quotation nor fixed deposit certificates. "It is clear that these officials, who were responsible for financial management, did not follow due diligence before depositing Rs 55 crore in the IOB," a government order stated, adding that the officials' fiscal indiscipline resulted in misuse of funds.

Pending disciplinary action, the RDPR department has placed Patil, Kumar and Shankarachari under suspension under Section 10 of the Karnataka Civil Service (Classification, Control and Appeal) Rules, 1957.