Nagpur/Yavatmal: The Enforcement Directorate (ED) on Thursday launched searches at around nine locations across Yavatmal district in connection with a money laundering probe into alleged large-scale financial irregularities at the now-defunct Babaji Date Mahila Sahakari Bank.
The searches were conducted under the provisions of the Prevention of Money Laundering Act (PMLA) and stem from multiple FIRs registered by Avdhutwadi Police in Yavatmal against the bank’s officials, employees and several borrowers.
ED officials are probing the alleged diversion of loan funds and the financial transactions linked to the suspected irregularities. Premises connected with persons allegedly associated with the case were searched as part of the operation.
Licence cancelled in 2022
The action comes against the backdrop of the Reserve Bank of India’s decision to cancel the licence of Babaji Date Mahila Sahakari Bank in 2022 following complaints concerning alleged fraud and misappropriation of depositors’ funds.
Subsequently, the Maharashtra Government ordered a special audit into the bank’s financial affairs. According to officials, the audit detected serious irregularities in the sanction and disbursement of loans.
The probe has allegedly revealed that the bank’s chairperson, CEO, directors and other officials were involved in sanctioning loans in alleged connivance with borrowers, valuers and auditors.
Loans allegedly sanctioned without adequate security
Investigators suspect that loans were sanctioned and disbursed without proper collateral and without adequately assessing the repayment capacity of beneficiaries.
The funds were allegedly diverted for purposes contrary to the bank’s bye-laws, internal loan policy and RBI guidelines, officials said.
The ED is now examining the money trail to determine how the allegedly diverted funds were transferred and utilised and to identify all persons who may have benefited from the transactions.
Rs 242-crore fraud under scanner
According to the allegations being investigated, a fraud of around Rs 242 crore was committed through alleged collusion between the bank’s chairperson, officials and loan beneficiaries.
The PMLA investigation was initiated on the basis of the FIRs registered by Yavatmal police, with the ED now tracing the proceeds allegedly generated through the suspected banking irregularities.
The searches are aimed at gathering documentary and digital evidence relating to loan sanctions, disbursements, collateral, financial transactions and the movement of the alleged proceeds.
Details of any cash, documents, digital devices or other material seized during Thursday’s searches were not immediately available.
The investigation is continuing.
