ED arrests defaulter in Sri Guru Raghavendra Sahakara Bank Niyamitha case

The Directorate of Enforcement has arrested a defaulter of Sri Guru Raghavendra Sahakara Bank Niyamitha case with mis-appropriation of public deposits of more than Rs 1000 crore.

The arrested is identified as Rajesh VR, 50, one of the major beneficiaries of the fund siphoned off from the bank in connivance with the management of the bank.

Rajesh, a resident of Rajarajeshwarinagar has availed a loan of Rs 40.40 crore as per the inspection report of the Reserve Bank of India. The ED arrested him under the Prevention of Money Laundering Act, 2002. Rajesh has not repaid the loans availed from the bank. Multiple FIR’s were registered against Rajesh and his wife Nagavalli B S in case of public frauds committed by them and other cooperative banks/societies also. Hence, they are habitual offenders.

Earlier, an ECIR was recorded by the ED based on the basis of FIR registered under various sections of IPC and u/s 9 of Karnataka Protection of Interest Depositors in Financial Establishments Act, 2004 in Banasawadi and other police stations in Bengaluru against the bank officials and others.

During the investigation the ED has found that officers and employees of the bank siphoned off the money deposited by the public with the bank. The Bank promised to give higher interest rates to the depositors which were not in the line with the prevailing market rate.

The money deposited by the depositors was advanced/siphoned off to various persons including employees of the bank without obtaining proper security of the loans. The bank officers created fictitious loan accounts and transferred the money to these accounts without proper scrutiny of the loans, which in turn was transferred to overdue loan accounts for evergreening purposes to show strong financial health of the bank, according to the ED press statement.

The ED had earlier attached movable and immovable properties belonging to the accused persons valuing to Rs. 45.32 crore and had arrested the former president of the K Ramakrishna, President of the bank in February 2022.

The Principal City Civil and Sessions Judge, Bengaluru has granted Rajesh to the custody of ED for three days. Further investigation is on.