₹100 crore fraud:
ED probes Bengaluru’s Souharda banks for allegedly cheating 15,000 depositors
Jul 17, 2025
Synopsis
The Enforcement Directorate (ED) in Karnataka conducted raids at multiple locations in Bengaluru concerning a Rs 100 crore deposit scam involving Shushruti Souhardha Bank, Shruthi Souharda Bank, and Shree Lakshmi Souharda Bank. Promoters, N. Srinivas Murthy and his family, are accused of diverting deposits through unsecured loans, leading to NPAs and property purchases.
The Enforcement Directorate (ED) Karnataka on Thursday launched massive search operations at more than 15 locations in and around Bengaluru in connection with a Rs 100 crore deposit scam involving Shushruti Souhardha Bank, Shruthi Souharda Bank, and Shree Lakshmi Souharda Bank.
The raids target the banks’ promoters, N. Srinivas Murthy and his family members, who are accused of cheating over 15,000 depositors by luring them with the promise of high interest rates on deposits. According to the ED, once the deposits were secured, the funds were diverted through unsecured loans to close associates of the promoters.
Most of these loans turned into Non-Performing Assets (NPAs).
The money was then laundered and used to purchase properties, which constitutes a clear violation of the Prevention of Money Laundering Act (PMLA).
"he Proceeds of Crime (PoC) in the instant case exceeds Rs 100 crore.
During the ongoing search operations, the ED uncovered more than 20 high-value properties that had not been identified in earlier investigations by the Karnataka Protection of Interest of Depositors in Financial Establishments (KPIDE), suggesting a wider scale of money laundering and asset concealment than initially estimated.
Murthy's 2022 fraud
The ED’s action follows an earlier May 8, 2024 revelation, when the state government ordered the attachment of 22 properties linked to Shruthi Souharda Pattina Sahakari Niyamita and individuals associated with it, again including Srinivas Murthy, in connection with a ₹110 crore fraud first exposed in 2022, as per TOI.
An audit by the cooperative department that year revealed that over 1,500 depositors, including retired BEL employees and garment workers from Peenya and Rajagopalanagar, were duped. According to police, the suspects allegedly collected public money in the form of deposits and used it to acquire land, movable and immovable assets, instead of returning it on maturity.
The Revenue Department issued an official property attachment order on April 20, 2024, based on a report submitted by the Economic Offences Wing (EOW) of the Central Crime Branch (CCB). The report confirmed illegal deposit collection and misuse of funds, dismissing the suspects’ claim that losses were a result of the Covid-19 pandemic.
Five people, including Srinivas Murthy, then chairman of the cooperative bank, were arrested in 2022, with cases registered across Rajagopalanagar, Sanjayanagar, and Wilson Garden police stations.
All were later released on bail.
[The Economic Times]
