On a winter morning of January 10 2020 most unsuspecting depositors of Sri.
Guru Raghavendra Sahakara Bank Niyamitha came near bank a few of them of
course who realised that they cannot withdraw more than Rs. 35000/- wanted to
know more but were told it is a temporary arrangement due to some issue of
Compliance and that following March 31 everything should be alright. Even MP of
this constituency Sri. Tejaswi Surya on 13th through various Media interviews
assured Depositors that nothing serious has happened and Finance Minister is
monitoring the situation and that issue will be resolved very soon. Then most
depositors realised that Restriction U/s 35A of BR Act 1949 (AACS) has been
imposed on the Bank for a period of six months and all-inclusive direction has been
placed so that withdrawal limit is permissible only up-to Rs.35000/-. This reality
started to sink in that something serious has happened but for a layman depositor
cannot withdraw more than Rs. 35000/- and depositors were convinced that it is a
temporary step.

However, truth started emerging in layers, first it was told by the Bank
management that there are some compliance issues where RBI has asked for some
Documents pending submission, once submitted restriction will go however when it
took long and no communication was forthcoming from the Bank, Management
slowly started by telling us that there is some issue of NPA which needs attention.
Some pending loan recovery needs to be done which would automatically remove
this restriction. On this it was told that Loan recovery from the defaulters is on full
swing and Bank CEO Mr. Santhosh used to give daily account of loan recovery being
made on daily basis. This went on for a few months and as per Santhosh score board
keep ticking but no tangible changes seen in terms of safety of our money with RBI
giving no access to the genuine information no clarity on impending situation on

It was told that RBI has asked to make a loan recovery of Rs.375 crores, and
capitalization of about 200 crores and all NPA loans be dealt with utmost priority
but nothing moved. Bank Management would give depositors some data and give us

false assurance but nothing happened on ground be it recovery or capitalization is
concerned. Then resentment of Depositors started which resulted in Board of
Director and Bank Management being superseded by Registrar of Cooperative
Societies on recommendation of RBI. Mr. Diwakar KCS was appointed Administrator
of Sri Guru Raghavendra Bank on May 18 2020.

However before this happened towards the end of March 2020 just before
Covid Restrictions were imposed nationwide there was an entry of 3 important
Politicians happened Mr. Tejaswi Surya MP Bangalore, Mr. Ravi Subramanya MLA
Basavanagudi Constituency and Mr. Uday Garuduachar MLA Chickpet
Constituency. Their entry was assumed by many a depositors as a great boon and
that these Politicians would contribute towards recovery of this Bank but Covid
Restriction and Pandemic helped Bank Management and these Politicians to do
capricious misdemeanors. However after Bank Management was superseded
Directors including Mr. Ramakrishna President and other Directors went into
hiding. Meantime a Public Interest Litigation was filed for reconstruction of the Bank
and seeking direction to punish those who inflicted this Scam on Depositors.

In the meantime Mr.Diwakar Administrator of this Bank with his limited
knowledge of Banking and mandated for Liquidation of the started proceeded in that
direction. He upon assuming charge gave accounts and liquidity position
recommended enhancement of withdrawal limit from Rs.35000 to Rs.100000 and
enhancement of Rs,65000/-. Further on multiple occasion it was found that he gave
affidavit to the court stating that loan recovery is not happening or very low recovery.
Chief Justice Bench of High Court of Karnataka which is hearing this PIL passed
strictures on the Administrator for not able to do loan recovery and his inability even
to start serving notices under SARFAESI Act to the borrowers and initiate Auction
of Collateral Securities to recover borrowed money. Further Hon. High Court of
Karnataka recommended a Banking Expert be appointed as Administrator who
understands Banking and Banking Scams in order to understand the extent of
Damage and roadmap for recovery.

On November 10 2020 Mr.Ashokan Retired General Manager was appointed
as Administrator who upon assuming duties started to dig the Details of this bank
scam. As per Mr.Ashokan there has been deep rooted conspiracy of the Bank
management to usurp public money by various methodologies. Sanctioning loans to
unscrupulous elements without proper security, Evergreening of overdue Loan
accounts to show artificially Low NPA, giving high rate of interest on deposits, giving
exorbitant commissions to agents who bring in new deposits. Bank Management
misusing their position in Bank to help in Money Laundering and other nefarious
activities thus putting Depositors Hard earned Money. In fact, as per Mr. Ashokan
and as confirmed in RBI Inspection report that this bank has been involved in all
those nefarious activities since 2008-09. It is a different matter that RBI despite
conducting biannual and annual inspection in addition to truck load of reports that
it seeks from the Bank. RBI and its officials have been continuously overlooking
egregious activity that is going in the bank for the reasons best known to its officials.
In fact and in reality Mr.Ashokan says that scam may have started to happen not
from 2008-09 but may be from 2001 onwards however RBI was blindfolded to find
out any fraud happening like it could not find in any other bank across the Country.
RBI’s entry always happens like in most Hindi movies when Police will appear, with
pistols and gun pointing at people and says nobody will move and hands up. RBI
also does the same thing, it has all the paraphernalia required to detect any frauds,
it has the best technology, huge budgetary allocations and well trained staff to catch
the fraud before it can cause havoc but usually chooses to appear on the scene like
Police in Hindi movies at the end. Only difference being Police usually didn’t know
who was the Villain but RBI was fully aware of who are the villain in most of the
cases. RBI as a Regulatory Body has miserably failed on multiple occasions since its

Registrar of Cooperative Societies as a Governing Bodies of all the Cooperative
Bank with huge number of staff and its hierarchy along with its paraphernalia has
also failed miserably to detect, diagnose and treat such sinister plans of these
unscrupulous elements who are lurking to gobble public money. Legal system
provides for enough provision in the form Karnataka Cooperative Societies Act which
is there to be used for protecting hard earned money of the Depositors but more
often than not even RCS has shown its laxity, complacency and indolence in preventing fraudsters in Cooperative Movement to foist sinister design defraud
gullible depositors. Frequently officials are seen complicit with such elements to
swindle public money and give them enough space to escape the punishment using
frailties of the law.

Chartered Accountants of this Bank both Internal Auditors and External
Auditors have played a major role in this entire scam. Chartered Accountants
concocted accounts and prepared Audit Report year after year to suit the need of
Bank Management showing conjured NPA figures, helped, aided & abetted
fraudulent Bank Management to show a very rosy picture of the Bank financials and
attract Depositors with high rate of returns on their investment be it Shares or
Deposits and finally due to specious audit report destroyed the Bank.

Staff in the Bank were part of this sinister plot to defraud depositors money
by cooperating with Bank Management who have continuously plundering the bank.
A few staff members like Mr. Vasudev Maiyya who committed suicide was
fountainhead of skulduggery followed by Murulidhar Erkady both of whom were
colleagues in Karnataka Bank with dubious background. Murulidhar Erkady joined
the Bank giving forged documents of their employment records which were
discovered by current Administrator and a criminal case was filed against him, in
addition there are other Staff members like Santhosh, Prashanth, Sripad Hegde
were arrested on charges of siphoning money of the Bank for personal gain and a
case is pending against them and they are out on bail like their mentors in Board

Similarly, Politicians have also played important role in becoming a part of
this scam as they gave all kinds of Political backing and fertile ground to sow the
seeds of chicanery so that they can also slice of this illicit money.

This entire scam which has been continuously perpetrated on the Depositors
for nearly 20 years has worked like a parallel system like an underworld where all
gangster gang up together form their own rules, play by their own law and cheat the
people at their own will as wantonly and audaciously as they can with a feeling of indomitable spirit. RBI & RCS which was governing body came into to the PICTURE
just like in old hindi movie when they came as said nobody moves to the depositors
and let all perpetrators escape. Police as usual are sitting ducks buckling under
Political pressure. Only ray of hope that seems to be dawning is from the Court
however how long will it take is a question of reality. In the midst of all darkness
lurking around Depositors are running from post to pillar in order to find out their
fate and fate of their hard earned money, trying to find hope from hopeless situation,
trying to pray all god who have not responded yet.


Author :-
A Freelance Journalist & a depositor in Sri Guru Raghavendra Sahakara Bank
Limited Residing in Bangalore


NOTE: Author is solely responsible for all views/information expressed in the article.
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