Mumbai. The Enforcement Directorate (ED) has launched search operations at nine locations in Maharashtra’s Yavatmal district in connection with an alleged ₹242 crore money laundering case. The searches are part of an investigation into alleged irregularities involving loans issued by Babaji Date Mahila Sahakari Bank Ltd. The ED’s Mumbai zone team is conducting the operation in coordination with security forces.
The case stems from multiple FIRs registered at Avdhutwadi Police Station in Yavatmal. The FIRs relate to officials and employees of Babaji Date Mahila Sahakari Bank as well as people who had obtained loans from the bank. The investigation has focused on alleged irregularities in the bank’s operations, loan approvals and the subsequent use of loan funds.
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Bank Licence Was Cancelled in 2022
Babaji Date Mahila Sahakari Bank Ltd was registered under Section 9(1) of the Maharashtra Cooperative Societies Act, 1960. The Reserve Bank of India cancelled the bank’s licence in 2022. Following multiple complaints alleging fraud and misuse of depositors’ funds, the state government ordered a special audit of the bank.
The special audit raised questions over the role of the bank’s then chief executive officer, chairperson, chairman, directors and other officials. It was alleged that bank officials colluded with borrowers, valuers and auditors to sanction loans without adequate collateral. The borrowers’ ability to repay the loans was also allegedly not assessed properly.
Alleged Diversion of Loan Funds
The investigation further found that loan funds were allegedly diverted and used in violation of the bank’s bylaws, lending policy and RBI guidelines. According to officials, the chairperson and other bank officials allegedly acted in collusion with loan beneficiaries, resulting in an alleged fraud of around ₹242 crore.
The ED’s investigation has identified an alleged nexus between bank officials and borrowers. According to the agency, part of the funds received by borrowers was allegedly withdrawn for personal use. Some of the money was reportedly withdrawn in cash, while a portion was allegedly used for loan evergreening, under which new loans are used to keep existing loans from being classified as stressed or defaulted.
Alleged Kickbacks to Bank Officials
The agency has also alleged that a portion of the money obtained through loans was transferred to bank officials’ accounts as alleged commissions or kickbacks. This has brought not only the borrowers but also bank officials and employees under scrutiny in the investigation.
The searches at nine locations are focused on tracing the alleged money trail and examining bank accounts, loan-related documents and other financial records. The ED is expected to examine documents and digital or financial evidence recovered during the searches to establish the movement of funds and identify the beneficiaries.
The allegations in the case remain subject to investigation and judicial proceedings. The ED’s action is aimed at tracing the flow of the alleged proceeds of crime, identifying their beneficiaries and examining financial links between bank officials and borrowers.
The agency is also investigating how the alleged ₹242 crore fraud proceeds were moved through various bank accounts and whether the funds were subsequently used to acquire or finance assets and other personal or business expenses. Further action will depend on the evidence gathered during the ongoing investigation.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
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