Mumbai, Oct 6 (IANS) The Enforcement Directorate’s Mumbai Zonal Office-II conducted search operations at nine locations in Yavatmal district of Maharashtra under the Prevention of Money Laundering Act (PMLA), 2002, exposing a massive fraud involving officials of Babaji Date Mahila Sahakari Bank Ltd and its borrowers, the agency said in a statement.
The investigation was launched on the basis of multiple FIRs registered by Avdhutwadi Police Station, Yavatmal, against the bank’s officials, employees and borrowers, it said.
The bank, originally registered under Section 9(1) of the Maharashtra Cooperative Societies Act, 1960, had its licence cancelled by the Reserve Bank of India in 2022. Following a series of complaints alleging fraud and misutilisation of depositors’ money, the state government ordered a special audit.
The audit revealed that the CEO, Chairperson, Directors and other bank officials, in connivance with borrowers, valuers and auditors, had disbursed loans without proper collateral and without adequately assessing the borrowers’ repayment capacity. The loan funds were subsequently diverted in violation of the bank’s bye-laws, loan policy and RBI guidelines.
Investigators found that a fraud amounting to Rs 242 crore had been committed by the Chairperson and bank officials in collusion with loan beneficiaries. The local law enforcement agency has already filed a chargesheet in the case.
The searches established the existence of a large nexus between bank officials and borrowers in the perpetration of the fraud. Money taken by borrowers was siphoned off for personal use, withdrawn in cash, used for evergreening of loans, and transferred to accounts of bank officials as kickbacks.
Officials also used credentials of existing borrowers to open dummy loan accounts, manipulated the valuation of mortgaged properties, and siphoned off the loan amounts so availed. A large number of incriminating documents, including property papers, were seized during the operation. Further investigation is in progress.
The case points to systemic lapses in the functioning of the cooperative bank and the alleged collusion between its management and beneficiaries that led to the diversion of public funds on a significant scale.
–IANS
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