The KERALA POLICE Economic Crime Branch on Sunday arrested four officials of a cooperative bank controlled by CPI (M) in the Thrissur area, where a loan scam of at least Rs 104 crore was discovered last week.
Among those arrested were the secretary, manager, chief accountant and commissioner of the Karuvannur Cooperative Bank.
The police also raided the premises of the arrested, as well as the property of two escaped bank employees in Karuvannur, and seized documents related to illegal loans. All the defendants are members of the KPI (M), who were dismissed from the party after the disclosure of the scam on July 19.
Opposition Congress and Bjpwho are targeting the ruling party in the state on the matter claim the loan scam is Rs Rs 300 crore. Minister of State Cooperation V.N. Vasavan, however, stated that an internal investigation had uncovered financial fraud in the amount of Rs 104.37 crore.
The government also dismissed the bank’s governing body, which had been run by CPI (M) for the past 40 years, and placed it under the authority of an administrator.
Vasavan said there were no omissions on the part of the government. “When the anomalies became noticeable, we removed the relevant officials and ordered an investigation. Civil and criminal cases were initiated. We have nothing to hide, ”he said.
According to the minister, the defendants redirected loans to accounts set up at fake addresses and manipulated banking software. According to him, those guilty of fraud will be brought to justice.
The accused bank officials allegedly transferred crores of rupees to several companies, including two tourism businesses that did not take off during the lockdown. The defendants themselves were the promoters of the projects.
In one case, sources said, more than 100 loan accounts were allegedly created in fictitious names, and 50,000 rupees each were credited to these accounts. It is believed that the accused bank employees thus forged addresses and documents in order to pocket Rs 50 crores. Many day laborers who applied for a bank loan never received the amount credited to their accounts, but received collection notices for default on loan repayments.
According to sources, the bank did not use collateral in such transactions.
In some cases, loans were provided even to those who did not apply for them. The co-operative bank’s loan ceiling was allegedly breached in order to transfer huge sums to the bins of bank officials and local CPI (M) leaders.
BJP Secretary of State N. Nagesh said that the bank made huge loans illegally without securing collateral. “The bank had intermediaries who helped with loans. In the case of large loans, these intermediaries left 10% of the amount as a commission. Individuals who had never applied for a loan were allocated 50 lakhs each. Bank employees created fake addresses and accounts to rob money, ”he said.
The cooperative bank reportedly has a deposit of Rs 358 crores and a loan of Rs 320 crores. CPI (M) Branch Committee Member, K.K. Divakaran, has been the president of the bank for the past 10 years.