The Enforcement Directorate (ED) in Kochi carried out search operations on 7 November 2025 at five locations in Thiruvananthapuram. These searches were part of an ongoing investigation under the Prevention of Money Laundering Act (PMLA), 2002 against Nemom Service Co-operative Bank Ltd., its former management, and others involved. According to reports, a fraud of Rs. 50 crore has been reported at Nemom Co-operative Bank.
How the Case Began
The ED started its investigation based on 24 FIRs filed by the Kerala Police. The FIRs alleged that the bank’s Managing Committee misused and misappropriated public money, failed to return deposits to customers and caused major financial losses to depositors. During the investigation, ED recorded statements from depositors under Section 50 of PMLA. Many depositors said that they deposited their savings in the bank and later, they were not allowed to withdraw their money, even after repeated requests. They suspected serious mismanagement by the earlier Managing Committee.
Major Financial Irregularities Found
The ED’s investigation and the Registrar of Cooperative Societies’ report dated 8 August 2025 revealed:
- Misappropriation of around Rs 50 crore
- Creation of fake and forged documents
- Loans sanctioned far beyond permissible limits
- Acceptance of deposits violating rules and circulars
- Diversion of funds for unauthorised purposes
- Overall financial mismanagement that led to the bank failing to repay depositors
So far, 380 criminal cases have been registered in connection with this scam, out of which 368 cases have been handed over to the Kerala Crime Branch. The ED conducted searches at premises linked to bank officials and individuals connected to the fraud. ED found Fake Fixed Deposit (FD) certificates created in the name of an individual. These fake FDs were used to take huge loans from the bank and another institution. ED also found Hard disk data of depositors and defaulting loan accounts, retrieved for forensic analysis.
At the former Secretary/Director’s residence 15 original FD receipts worth about Rs 50 lakh were found and Multiple property documents were also found.
Around 1200 depositors had deposited Rs 112 crore in the bank. Earlier, it was found that there was an irregularity of Rs 96 crore. Soon after the news of the fraud emerged, the former president and secretary of the bank’s governing body, ruled by the CPM, were arrested. CPM area committee member and former president of the bank, R Pradeep Kumar, and former secretary Balachandran Nair were arrested.
Balachandran Nair committed a fraud of Rs 20.76 crore and Pradeep Kumar a fraud of Rs 3 crore. Although a charge sheet has been filed against former secretary A R Rajendra Kumar, who committed a fraud of Rs 32 crore and S S Sandhya, who committed an irregularity of Rs 10.41 crore, as accused, no arrests were made. The figures of losses caused to the bank by each of the board members over a period of ten years have also come to light.
The government appointed committee found that only Rs 15.55 crore of this was pledged as collateral. Meanwhile, a few days ago, the bank had detained the administrator in protest against the non-return of money to the investors despite the withdrawal of more than Rs 60 lakh.
A preliminary inquiry by the Cooperative Department found loan-related manipulations involving nearly Rs 100 crore. The investigation revealed that loans were given to people who were not members of the bank and in many cases without proper guarantees, officials said.
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