ED seizes properties of Former Bank Chairman for irregularities in Loan

The Directorate of Enforcement (ED), Bengaluru Zonal Office, has seized two immovable properties worth about ₹3.62 crore belonging to N. Srinivasa Murthy, former Chairman of Shushruti Souharda Sahakara Bank Niyamitha, and his relative Smt. Rathnamma. This action was taken under the Prevention of Money Laundering Act (PMLA), 2002 in connection with a case of cheating bank depositors.

The investigation began by ED after receiving several FIRs by Karnataka Police. These FIRs alleged that the bank failed to return deposits or pay interest on Fixed Deposits and Savings Accounts. It was further alleged that the Chairman, Directors, and employees colluded to siphon off depositors’ money, thereby cheating account holders.

During the ED investigation, it was found that Srinivasa Murthy, his wife Dharini Devi, and their daughter Mokshatara—who were Chairman, Director, and Functional Director of the bank—played a key role in the diversion of funds. The probe also revealed that Murthy created multiple financial entities, including Shruti Souharda Credit Co-operative Society and Shree Lakshmi Mahila Co-op Society (managed by his relative Rathnamma), to collect deposits and cheat investors.

ED found that Murthy and others sanctioned loans to close associates without proper procedure or collateral and later used the loan amounts to buy properties in their own names. These loans were eventually turned into NPAs (non-performing assets).

The investigation is underway and more details will be released soon.