An audit of Sri Guru Raghavendra Sahakara Bank Niyamitha (SGRSBN) in Bengaluru – where depositors were defrauded – found that Rs.1,480 crore had been embezzled and about Rs.890 crore, or 60%, was granted in the form of loans to 24 accounts, the Karnataka assembly was informed on Monday.
In response to a question from BJP MP Ravi Subramanya, the cooperative department stated that “in the audit report that was shared with the government in the first week of September, it was revealed that the bank had a loss of Rs 1,923 crore of which Rs 1,480 crore was embezzled.
The documents show that a huge loan of Rs 890 crore was released to 24 beneficiaries, which is part of a misappropriation.
As of July 9, the bank is required to pay 2,073 crore rupees and 375 crore rupees as interest to 994 holders of fixed deposits.
In January last year, the Reserve Bank of India (RBI) imposed a withdrawal limit of Rs 35,000 citing the bank’s bad debts. The cap was raised to Rs 1 lakh later.
A source from the bank said it has yet to submit a conclusive report to the government, but a huge sum of money has been defrauded.
While bank executives previously tried to minimize the fraud by saying they would get the money back, documents show that as of January 10, 2020, the bank’s total outstanding loan amount was Rs 1,567 crore. and as of August 31, 2021, only Rs 182 crore had been recovered. .
There are around 35,000 depositors in this cooperative bank where many people – many of them elderly people in southern Bengaluru – have deposited their savings for life.
The Criminal Investigation Department (CID) which conducted an investigation was able to find a total of 9,548 accounts linked to members of the bank’s board of directors and other defendants involved where Rs 15 crore were deposited. The accounts have been frozen.
The CID to date has named 37 defendants, including the head and directors of the bank, where 11 people are on bail and four have died. The Depositors’ Association, when contacted, indicated that at least 60 depositors have died.
While the Union Cabinet in July authorized changes to deposit insurance laws to provide funds up to Rs 5 lakh to an account holder within 90 days in the event a bank falls under the coup of the moratorium imposed by the RBI.
However, in the response filed in the state legislature, the Department of Co-operatives stated that depositors with serious health issues can receive Rs 5 lakh with permission from RBI.
In addition to depositors from Guru Raghavendra Bank, around 3,500 depositors from Sri Guru Sarvabhauma Souharda Credit Co-operative Society, a sister company of the bank, are also struggling.
According to a report dated June 7, 2021 submitted by the administrator of the company to the High Court, it shows that around 284 crore rupees were diverted from the company to accommodate the bad debts of the bank.
A source from the company said that technically the company is a client / depositor of Guru Raghavendra Bank and the company’s 3,500 depositors will also have to receive five lakhs of rupees due to the bank’s sinking.
