The Enforcement Directorate on Wednesday arrested president of Sri Guru Raghavendra Sahakara Bank Niyamitha in connection with an alleged money laundering case and misappropriation of over ₹1,000 crore of depositors’ savings.
The president of the cooperative bank, K. Ramakrishna, was booked under various sections of the Prevention of Money Laundering Act, 2002.
Thousands of depositors were left in the lurch after the fraud came to light two years ago. The ED took up the case in February 2020 based on an FIR registered by the Banaswadi police under the Karnataka Protection of Interest of Depositors in Financial Establishments Act.
During the investigation, the ED found that senior bank officials, officers and even employees of the bank had siphoned off money deposited. The bank allegedly promised high interest rates to depositors even though it was not in line with the prevailing market rate. The money deposited was siphoned off to various persons including employees of the bank without obtaining proper security of the loans, said the ED.
Bank officers created fictitious loan accounts and transferred the money to these accounts. From there the money was transferred to overdue loan accounts to show that the financial health of the bank was strong.
The Enforcement Directorate had attached ₹45 crore of movable and immovable properties belonging to Ramkakrishna, and other accused including his family members, the former CEO and key officials.
He was produced before the Principal City Civil and Sessions Court and will remain in ED custody for four days for further investigation.
