ED raids in PMLA probe against Yavatmal cooperative bank

The Enforcement Directorate searched nine premises in Maharashtra’s Yavatmal district in a money laundering case linked to alleged financial irregularities at Babaji Date Mahila Sahakari Bank. Officials alleged improper loan disbursals, fund diversion and a Rs 242-crore fraud involving bank officials and borrowers

Mumbai: The Enforcement Directorate on Thursday conducted searches at multiple premises in Maharashtra’s Yavatmal district as part of a money laundering investigation into alleged financial irregularities in a local cooperative bank, officials said.

The case is based on multiple FIRs registered by the Avdhutwadi Police Station, Yavatmal against the officials and employees of Babaji Date Mahila Sahakari Bank and its borrowers.

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They said around nine locations were covered during the raids that were launched after a case was registered by the central agency under the Prevention of Money Laundering Act (PMLA).

Officials said the license of the bank was cancelled by the RBI in 2022 on the basis of multiple complaints of fraud and mis-utilisation of depositors’ money.

A special audit was ordered by the state government and it was found that the CEO, chairperson/chairman, directors and bank officials, in alleged connivance with borrowers, valuers and auditors, disbursed loans without proper collateral and without adequate assessment of repayment capacity, according to the officials.

The loan funds were “diverted” contrary to the bank’s bye-laws/loan policy and RBI guidelines.

It is alleged that a fraud of Rs 242 crore was committed by the chairperson and bank officials in collusion with loan beneficiaries.