Daijiworld Media Network – Mumbai

Mumbai, Oct 1: The Enforcement Directorate (ED) on Thursday conducted search operations at nine locations in Maharashtra’s Yavatmal district as part of its ongoing investigation into an alleged Rs 242-crore money laundering case involving Babaji Date Mahila Sahakari Bank.

The case stems from multiple FIRs registered by Avdhutwadi Police Station in Yavatmal against officials and employees of the cooperative bank and its borrowers. The ED’s Mumbai zone conducted the searches in coordination with security forces.

The bank’s licence was cancelled by the Reserve Bank of India in 2022 following complaints of fraud and misuse of depositors’ money. A special audit ordered by the Maharashtra government allegedly found that the bank’s CEO, chairperson, directors and other officials, in alleged collusion with borrowers, valuers and auditors, sanctioned loans without adequate collateral and proper assessment of repayment capacity.

According to officials, the loan funds were allegedly diverted in violation of the bank’s bylaws, loan policy and RBI guidelines. The officials have alleged that fraud amounting to Rs 242 crore was committed by the chairperson and bank officials in collusion with loan beneficiaries.

The ED’s investigation has so far indicated an alleged nexus between bank officials and borrowers in the suspected financial irregularities. Investigators found that funds obtained through loans were allegedly diverted for personal use, withdrawn in cash, used for evergreening of loans and transferred to accounts linked to bank officials as kickbacks, among other purposes.

The investigation is ongoing.