Rs 100 Crore Scam Exposed: Bengaluru ED Raids Souharda Banks

The420.in Staff
3 Min Read

BENGALURU:  The Enforcement Directorate (ED) in Karnataka executed coordinated search operations on Thursday across more than 15 locations in and around Bengaluru in connection with a suspected ₹100 crore deposit fraud. The probe involves three cooperative banks—Shushruti Souhardha Bank, Shruthi Souharda Bank and Shree Lakshmi Souharda Bank—and centres around allegations of cheating nearly 15,000 depositors.

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High-Interest Payouts Turn Sour

Promoter N. Srinivas Murthy and close family members are accused of luring depositors with the promise of high interest rates. With public trust secured, funds were purportedly channelled via unsecured loans to the promoters’ associates. These loans, in many cases, quickly morphed into non‑performing assets, undermining the financial viability of the banks. The ED highlighted that the misappropriated funds were strategically cloaked, with laundered money being utilised to acquire real estate, constituting a violation under the Prevention of Money Laundering Act (PMLA). 

Discovery of Undeclared Assets

During the raids, ED teams uncovered over 20 high‑value properties linked to the accused—assets previously unreported in earlier audits conducted by state authorities under the Karnataka Protection of Interest of Depositors in Financial Establishments (KPIDE). These freshly uncovered assets may soon be seized under PMLA enforcement. 

Fraud’s Roots and Regulatory Action

The current ₹100 crore investigation builds on an earlier ₹110 crore cheating case that surfaced in 2022, involving the same parties. In that case, state investigations led to the attachment of 22 properties linked to Shruthi Souharda Bank on April 20, 2024. Over 1,500 depositors—comprising retirees, industrial workers, and small investors—lost capital when promised returns vanished. Five bank officials, including Murthy, were arrested but later released on bail. 

Despite growing regulatory scrutiny, the cooperative banking sector continues to reveal systematic vulnerabilities. Experts are urging reforms in oversight and governance to prevent recurrences of such large-scale deposit fraud.

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Ongoing Investigations and Depositor Redressal

The ED’s current operations form part of a wider crackdown on systemic irregularities within Karnataka’s cooperative banks. With forensic tracking of funds and assets now in full swing, legal analysts expect this case to serve as a key precedent for future prosecutions under PMLA. As proceedings unfold, affected depositors await clarity on restitution drawn from seized assets.

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