The Enforcement Directorate’s Bengaluru zonal office has provisionally attached immovable assets worth Rs 16.95 crore in connection with an alleged co-operative deposit fraud, intensifying scrutiny of financial governance within Karnataka’s urban credit institutions.
The action, taken under the Prevention of Money Laundering Act (PMLA), 2002, covers 11 properties located across Bengaluru, Ramanagara and Mysuru. Investigators allege that the assets were acquired using funds siphoned from a city-based co-operative credit society, marking a significant development in a case that has raised concerns over depositor protection and regulatory oversight. According to officials familiar with the probe, the investigation stems from a police complaint alleging that senior office-bearers of the co-operative society sanctioned unsecured loans to entities linked to themselves. These loans were allegedly left unpaid, resulting in financial losses to depositors who had entrusted their savings to the institution. Subsequent inquiries under the anti-money laundering framework indicated that nearly ₹65 crore in public deposits may have been diverted through a network of associated firms and personal bank accounts. Authorities believe portions of these funds were channelled into land purchases, constructed properties and business investments across southern Karnataka.
The attached assets include parcels of land, residential plots and built structures. Under PMLA provisions, such provisional attachment is aimed at preventing the disposal or transfer of properties suspected to be linked to proceeds of crime while adjudication proceedings continue. Financial crime experts note that co-operative credit societies play a crucial role in extending banking access to lower- and middle-income households, particularly in peri-urban and semi-urban belts. Weak governance in such institutions, they caution, can have cascading social consequences, eroding trust and undermining local economic stability. Urban policy analysts say the case highlights the importance of transparent lending practices and stricter supervisory frameworks for deposit-taking entities operating outside the mainstream banking system. In fast-growing regions around Bengaluru, where informal and semi-formal finance institutions often bridge credit gaps, oversight remains uneven. The Enforcement Directorate’s intervention also underscores a broader trend of central agencies increasingly targeting financial misconduct tied to real estate acquisition. Land and property remain preferred channels for converting illicit funds into tangible assets, given their perceived long-term value and capital appreciation potential.
Legal proceedings in the matter are expected to continue before the adjudicating authority under the PMLA. If confirmed, the attachment could pave the way for eventual confiscation of the properties. For depositors and residents in affected districts, the outcome may determine not only financial recovery prospects but also the future credibility of local co-operative institutions a cornerstone of community-level economic participation in Karnataka.
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Bengaluru ED attaches Rs 1695 crore assets
