Kerala Co-op Bank Scam: 16 officials suspended for lapses

PTI, Aug 11, 2021, 8:13 PM IST

The Kerala Government on Wednesday suspended 16 officials for their alleged lapses in detecting over Rs 100 crore loan scam in the CPI(M)-controlled Karuvannur Co-Operative bank in Thrissur district.

State Cooperative Minister V N Vasavan said the decision to take stringent action against 16 officials, including a joint registrar and three assistant registrars who failed to conduct proper auditing of the scam-hit bank, was on the basis of an interim report submitted by a high level inquiry committee constituted by the government.

The minister said he had received the interim report last night.

The decision to suspend the officials, mostly belonging to the state cooperative department, was taken at a meeting of top officials chaired by the minister here today.

Talking to PTI, Vasavan said the fraud in the Karuvannur cooperative bank had been committed since 2010 and it continued during the period of governments of both Congress-led UDF and CPI(M)-led LDF.

The minister also said if the role of any officials, who are retired now, are detected in the inquiry, they will also be investigated.

In the suspension order, the government said the inquiry committee has reported that the audit of the bank is under the control of the Thrissur District Joint Director (Audit) but no effective audit examinations of the bank’s accounts had been carried out by the officials concerned since 2014.

In the preliminary inquiry, it was found that the auditors and officials concerned failed to report the serious financial irregularities happening in the bank.

Meanwhile, the Crime Branch wing of the Kerala Police probing the multi-crore scam on Wednesday arrested two more persons in connection with the case, a police officer said in Thrissur.

The second and third accused, who were arrested today, are suspended employees of the bank, he told PTI.

The Crime Branch on Monday had arrested the prime accused in the scam. There are six accused in the case and investigation is on to nab three more persons, police said.

Police had registered a case against six bank officials and launched an investigation after the scam was detected.

After several people, including local customers raised apprehensions about the bank’s functioning, an audit had been conducted there recently, in which the charges were reportedly found to be true.

During the inspection, it was also found that loans were sanctioned on the property pledged by local customers without their knowledge and the loan amount was credited multiple times to the selected accounts.

The case was registered against bank officials, including the secretary of the bank, who were already placed under suspension following the allegations.