ED uncovers high-value properties in ₹100-cr co-op bank fraud probe in Bengaluru

The Enforcement Directorate (ED) has uncovered over 20 high-value properties during ongoing raids at more than 15 locations across Bengaluru in connection with a ₹100-crore cooperative bank fraud case. The searches are part of a money laundering investigation involving Shushruti Souhardha Bank, Shruthi Souharda Bank, and Shree Lakshmi Souharda Bank.

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The probe centres on N Srinivas Murthy and his family, who are accused of defrauding more than 15,000 depositors by promising inflated returns on deposits. Instead of honouring the payouts, the funds were allegedly routed through unsecured loans to close associates and later used to acquire properties—violating provisions of the Prevention of Money Laundering Act (PMLA).

Investigators have found that many of the assets recently identified had escaped the scrutiny of the Karnataka Protection of Interest of Depositors in Financial Establishments (KPIDE), suggesting a wider laundering network and deeper concealment of assets than previously assumed.

Murthy is already under scrutiny for an earlier cooperative banking scam. In 2022, he was arrested following complaints filed across multiple Bengaluru police stations. That case, involving Shruthi Souharda Pattina Sahakari Niyamita, was linked to a ₹110 crore fraud targeting over 1,500 depositors—many of them retired public-sector employees and daily-wage earners.

In response, the Karnataka government ordered the attachment of 22 properties in May 2024. The scam exposed how public deposits were misused for private land acquisitions instead of being returned upon maturity.