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Ex-CEO of crisis-hit Guru Raghavendra Sahakara bank in Karnataka booked for cheating

The bank is in the middle of a crisis following huge non-performing assets and Reserve Bank of India imposed restrictions from collecting deposits, lending loans and making investments.

Ex-CEO of crisis-hit Guru Raghavendra Sahakara bank in Karnataka booked for cheating

A case of cheating and forgery has been registered against the former chief executive officer of crisis-hit Guru Raghavendra Sahakara Bank Limited in Bengaluru, weeks after RBI cap on withdrawal-limit triggered panic among depositors.

According to police, the case has been registered based on a complaint by the present CEO officer A Santhosh Kumar against his predecessor Manur Vasudava Maiya.

The bank is in the middle of a crisis following huge non-performing assets and Reserve Bank of India imposed restrictions from collecting deposits, lending loans and making investments.

The apex bank had also last month capped the withdrawal limit to Rs 35,000.

Santhosh Kumar stated in his complaint that between 2012 and 2018, Maiya had allegedly lent money beyond his jurisdiction to various customers. "We want stringent action against Maiya for conspiring and betraying the bank," he stated in his complaint.

On January 10, the RBI imposed restrictions on Sri Guru Raghavendra Sahakara Bank restricting withdrawals to a limit of Rs 35000 and directed the bank to not grant or renew any loans or advances.

Worried customers of the bank gathered at the bank premises in Basavangudi when news of the RBI issuing the notice spread. However, the bank officials at the time had said that customers were assured that their deposits are safe.

The bank had earlier stated that the RBI restrictions were a result of a default on Rs 350 crore worth of loans; however, the loans can be recovered by taking over the assets given as securities. The bank had stated that ATMs would function normally and that it would seek clarifications from the RBI as well.

Many depositors likened the situation at the bank to the situation with the Punjab & Maharashtra Co-operative (PMC) Bank. In September, RBI had imposed restrictions on the imposed regulatory restrictions on the PMC Bank limiting withdrawals to Rs 1000.

However, BJP MP from Bengaluru South, Tejasvi Surya had insisted that false equivalences should not be drawn by comparing the bank's present situation with that of PMC Bank. "This is nothing like PMC Bank. We will ensure that the interests of stakeholders will be protected. I urge friends in the media to not draw false equivalence with what is happening here with what happened at PMC Bank," Tejasvi Surya added.

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