The Directorate of Enforcement (ED), Kochi Zonal Office, conducted search operations on November 7, 2025, at five locations in Thiruvananthapuram as part of its probe under the Prevention of Money Laundering Act (PMLA), 2002, against M/s Nemom Service Co-operative Bank Ltd. and associated individuals. The searches were carried out following serious allegations of large-scale financial misappropriation and deposit fraud.
Genesis of the Case
The ED initiated the investigation based on 24 FIRs registered by the Kerala Police against the bank and its office-bearers. The complaints accused the former Managing Committee of misappropriating public funds collected as deposits from the public and subsequently failing to return the money, causing significant financial losses to depositors.
The offences, registered under Section 420 of the Indian Penal Code (IPC) and Section 318(4) of the Bharatiya Nyaya Sanhita (BNS), 2023, qualify as Scheduled Offences under Part A of the Schedule to the PMLA, 2002.
Depositors’ Testimonies and Financial Irregularities
During the course of the investigation, depositors’ statements recorded under Section 50 of PMLA revealed that despite multiple requests, members were denied withdrawal of their savings. These statements raised serious questions about the financial management and decision-making of the then Managing Committee.
Further inquiry revealed grave procedural violations, including the acceptance of deposits and sanctioning of loans in contravention of the cooperative regulations, rules, and circulars.
Registrar’s Report Exposes ₹50-Crore Misappropriation
A final report dated August 8, 2025, submitted by the Registrar of Co-operative Societies, pointed to the misappropriation of funds worth approximately ₹50 crore.
The report detailed instances of forged documents, loans sanctioned beyond permissible limits, diversion of funds, and systematic financial mismanagement that led to the bank’s inability to meet its deposit obligations.
So far, 380 criminal cases have been registered in connection with the bank scam, of which 368 have been transferred to the State Crime Branch for further investigation.
Key Findings from ED Searches
The ED conducted coordinated search operations at five premises linked to the bank’s functionaries and beneficiaries.
A significant cache of manual records was recovered from the bank’s premises.
Investigators also seized fake Fixed Deposit (FD) certificates created in the name of one individual, which were allegedly used to obtain large loans from the bank and another financial institution.
Digital evidence, including hard disk data containing depositor details and default loan accounts, was retrieved for forensic examination.
At the residence of a former Secretary/Director, officials seized 15 original FD receipts valued at around ₹50 lakh and property-related documents.
At the former President’s residence, officials examined records of pledged assets and recorded his statement.
From the borrower’s premises, who had availed loans of about ₹7.2 crore, property and collateral documents tied to multiple institutions were recovered.
Ongoing Investigation
The ED said that the seized materials and documents are being analysed to trace the money trail, identify financial links, and determine the ultimate beneficiaries of the misappropriated funds.
A senior ED official noted that the operation is a crucial step in ensuring accountability and transparency in the cooperative banking sector.
“The investigation aims to uncover the complete chain of financial irregularities and bring to light those responsible for diverting public deposits,” the official said.
The probe is ongoing, and further actions, including additional summons and forensic audits, are expected in the coming weeks.
