Over 5 lakh depositors of Karnala Nagari Sahakari Bank might soon recover their lost funds, as the Enforcement Directorate (ED) has moved to restore properties linked to a Rs 560 crore fraud.
A Ray of Hope for Depositors
In a significant development, the Enforcement Directorate (ED) announced that it has restituted immovable properties worth Rs 386 crore to the competent authority. This move is a crucial step towards returning money to the over 5 lakh depositors who lost their savings due to an alleged fraud at Karnala Nagari Sahakari Bank.
The properties will now be distributed among the affected depositors, offering much-needed relief after years of waiting.
Unraveling the Rs 560 Crore Scam
The ED’s investigation stems from a money laundering case based on a complaint filed by Panvel police in February 2020. The primary accused is Vivekanand Shankar Patil, the bank’s erstwhile chairman and a three-term MLA from Panvel constituency.
Patil, along with 75 others, including the bank’s vice-chairman, CEO, and 12 directors, allegedly orchestrated a massive fraud. They created 63 bogus loan accounts using forged documents, bypassing RBI guidelines and standard banking norms. This elaborate scheme allowed them to siphon off Rs 560 crore for personal gains.
ED’s Swift Action and Property Attachments
The ED initiated its money laundering probe under the Prevention of Money Laundering Act (PMLA). Their investigation revealed that the illicit funds were diverted to various entities controlled by Patil and his relatives.
The siphoned money was primarily used to purchase immovable properties at different locations in Raigad district. The ED acted decisively, provisionally attaching these properties, valued at Rs 386 crore, in August 2021 and October 2023.
Vivekanand Shankar Patil was arrested in June 2021, and the central agency filed a prosecution complaint, similar to a chargesheet, on August 12, 2021. The trial is currently underway.
What Happens Next for the Properties?
With the ED’s restitution, the focus now shifts to distributing the recovered assets. The liquidator appointed by the Reserve Bank of India (RBI) approached the PMLA court for permission to release these properties.
In July, the court ordered the release of properties at Karnala Sports Academy, Panvel, to the liquidator for auction. Additionally, the competent authority, MPID, was directed to realize the land at Posari, Raigad, through auction, with the proceeds intended for distribution among the depositors.
- The ED has restituted Rs 386 crore worth of properties linked to the fraud.
- This action aims to return funds to over 5 lakh depositors of Karnala Nagari Sahakari Bank.
- The alleged fraud involved the bank’s ex-chairman, Vivekanand Shankar Patil, and others siphoning off Rs 560 crore.
- Court orders have been issued for the auction of seized properties to facilitate repayment.
This development marks a significant step towards justice and financial recovery for the many individuals affected by this large-scale banking fraud.
