RTI response reveals CBI not probing Karnataka bank scam, contradicts CM's claim

The Central Bureau of Investigation (CBI) in response to an RTI enquiry has said that it is not investigating the scam involving the Bengaluru-based Sri Guru Raghavendra Sahakara Bank Niyamitha (SGRSBN) cooperative bank, contradicting Karnataka Chief Minister Siddaramaiah’s claim in December 2023 that the case was handed over to the CBI.

The news that the CBI is not probing the scam is a big disappointment to the thousands of depositors who have lost their hard-earned savings.

In December last year, the chief minister had said that the depositors’ future was uncertain after the scam was exposed, and he confirmed that the central investigative agency had received approval to probe the case.

“Thousands of depositors had invested their lifetime savings in the bank with hopes of securing their retirement, children’s marriages, buying a house, and other dreams. Due to the bank’s fraudulent activities, they have now been left uncertain about their future,” said Siddaramaiah in December.

He also said that he had raised the issue of a CBI probe into the scam several times when he was serving as the Leader of the Opposition.

The scam

The scam involving the cooperative bank was uncovered when the Reserve Bank of India (RBI) imposed withdrawal restrictions on the bank, revealing misappropriation of almost ₹2,500 crores by the bank management.

More than 45,000 people had deposited money in the bank, and most of them received the ₹5 lakh insurance amount from the Deposit Insurance and Credit Guarantee Corporation. But over 15,000 depositors with deposits more than ₹6 lakh have not been fully compensated.

The Enforcement Directorate had attached the bank’s properties worth ₹159 crore.