ED cases against 16 coop banks, two societies in Kerala

‘Irregular loans have been granted, overvaluing mortgaged property’
ED cases against 16 coop banks, two societies in Kerala
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KOCHI: The Enforcement Directorate on Thursday informed the Kerala High Court that 18 ECIRs (Enforcement case information reports) have been registered against cooperative banks/societies in Kerala to investigate money laundering in connection with financial irregularities. Of these, 16 are cooperative banks and only two are societies.

Investigations revealed that all these cooperative establishments have been granting illegal loans with or without the borrowers’ knowledge. It is found that irregular loans have been granted, overvaluing mortgaged property and even multiple loans on the same mortgaged property, the ED said.

The central agency filed the report on the directive of a division bench, comprising Justices Amit Rawal and K V Jayakumar, regarding pending cases against cooperative societies. The bench issued the order on appeals filed by depositors of Mylapra and Kumplampoika cooperative banks in Pathanamthitta seeking refund of their deposit amounts following financial fraud cases in those societies.

In the affidavit, P Vinod Kumar, deputy director, directorate of enforcement, Kochi zonal office, said that during the investigation it was revealed that loans have been granted outside the limit of cooperative societies and also to persons who are eligible to be granted the loans. Large-scale money laundering has been carried out in societies and the ED has consequently proceeded to take action under the Prevention of Money Laundering Act, 2002, by confiscating property involved in money laundering and arresting offenders.

Many of the societies did not initiate any recovery proceedings in respect of the overdue loans while the offenders were holding office of the societies. ED is taking all earnest efforts permitted by law to restore the properties of the persons or claimants with a legitimate interest in the property, who may have suffered a quantifiable loss as a result of the offence of money laundering, the officer said.

The cooperative banks and societies against which ECIRs have been registered are: Ayanthole Service Cooperative Bank, Thumboor Cooperative Bank, Nadakkal Cooperative Bank, Mavelikkara Cooperative Bank, Moonnilavu Cooperative Bank, Kandala Cooperative Bank, Mylapra Cooperative Bank, Chathannoor Regional Service Cooperative Bank, BSNL Engineering Cooperative Society, Koni Regional Service Cooperative Bank, Mariyamuttam Service Cooperative Society, Karuvannur Cooperative Bank, Edamulakkal Cooperative Bank, Kolloorvila Cooperative Bank, Anakkayam Cooperative Bank, Mugu Service Cooperative Bank, Thennala Cooperative Bank and Pulpally Cooperative Bank.

Probe outcome

  • Investigations revealed that all these cooperative establishments have been granting illegal loans with or without the borrowers’ knowledge

  • The bench issued the order on appeals filed by depositors of Mylapra and Kumplampoika cooperative banks in Pathanamthitta

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