The Enforcement Directorate on Wednesday arrested Sri Guru Raghavendra Sahakara Bank chairman Niyamitha in an alleged money laundering case and misappropriation of depositors’ savings to the tune of over Rs 1,000 crore.
Co-operative bank chairman K. Ramakrishna was booked under various sections of the Prevention of Money Laundering Act, 2002.
Thousands of depositors were left in limbo since the fraud case came to light two years ago. The ED took up the matter on the basis of an FIR registered by Banaswadi Police in February 2020 under the Karnataka Protection of Interest of Depositors in Financial Establishment Act.
During the probe, the ED found that the bank’s senior officials, officials and even the bank employees had siphoned off the deposited money. The bank allegedly promised higher interest rates to the depositors even though it was not in line with the prevailing market rate. The ED said the deposited money was transferred to various persons including employees of the bank without obtaining proper security of the loan.
Bank officials transferred money to these accounts by creating fake loan accounts. From there the money was transferred to overdue loan accounts to show that the bank’s financial position was sound.
The Enforcement Directorate had attached movable and immovable assets worth Rs 45 crore of Ramakrishna and his family members, former CEOs and key officials, among other accused.
He was produced before the Principal City Civil and Sessions Court and will be in ED custody for four days for further investigation.
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