ED arrests president of Bengaluru based co-operative bank in money-laundering case

New Delhi: The Enforcement Directorate (ED) has arrested the president of a Bengaluru-based cooperative bank in a money-laundering case linked to alleged misappropriation of public funds to the tune of over Rs 1,000 crore, the agency said on Wednesday.

K Ramakrishna, president of Sri Guru Raghavendra Sahakara Bank Niyamitha, was subsequently produced before the principal city civil and sessions judge, who granted a four-day custody of the accused to the ED, it said in a statement.

The federal probe agency said “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 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 for the loans,” it said.

The agency alleged that the bank officials created “fictitious” loan accounts and transferred the money to these accounts, which in turn was transferred to overdue loan accounts for ever-greening purposes to show strong financial health of the bank.

Assets worth Rs 45 crore were attached by the ED in the case earlier, after it filed a money-laundering case against Ramakrishna and others in February 2020.

The case was filed after taking cognisance of a Bengaluru Police (Banaswadi police station) FIR registered under various sections of the IPC and the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 against the accused.