The Shushruti Souhardha Bank went kaput in 2022, and its promoters were arrested by the Karnataka police, following which the ED also launched a probe.
| Photo Credit: File photo
The Directorate of Enforcement (ED) raided more than 15 premises in and around Bengaluru related to N. Srinivas Murthy and his family members, promoters of three cooperative banks — Shushruti Souhardha Bank, Shruthi Souharda Bank and Shree Lakshmi Souharda Bank — on July 17.
The Shushruti Souhardha Bank went kaput in 2022, and its promoters were arrested by the Karnataka police, following which the ED also launched a probe.
In a statement issued on July 17, ED stated that proceeds of crime in the case is more than ₹100 crore. During its search operation on July 17, the agency uncovered more than 20 high-value properties that were not identified earlier by agencies of the government of Karnataka.
In April, 2022, Reserve Bank of India had imposed curbs, limiting withdrawals from Shushruti Souhardha Bank to a maximum of ₹5,000, over declining financial health of the lender, triggering panic among depositors. RBI also imposed a ban on renewing or giving any new loans. RBI cancelled the licence of the bank with effect from July 5, 2023.
Central Crime Branch of Bengaluru City Police had raided the premises and arrested the bank’s promoter N. Srinivas Murthy, and several others, in 2022. Then Cooperation Minister S. T. Somashekhar had informed the legislative Assembly that an audit had revealed that the bank had deposits of ₹180.77 crore and ₹110 crore had been misappropriated.
Promoters of the bank have been accused of cheating more than ₹100 crore from over 15,000 depositors.
“Subsequently, the funds were diverted through unsecured loans to associates. Most loans became NPAs, and the money was laundered and used to buy property, indicating clear Prevention of Money Laundering Act, 2002 violations,” ED said in a statement on July 17.
Published – July 17, 2025 04:07 pm IST
