Vasudeva Maiya (70), the former CEO of Bangalore-based Sri Guru Raghavendra Sahakara (SGRS) Bank, which has been under the Reserve Bank of India (RBI) scanner for irregularities, allegedly killed himself on Monday (July 6) by consuming poison in his car parked near his residence.
The bank, which has been operational since 1999, presented Maiya as the architect of the co-operative bank since he had built the business from scratch.
The SGRS Bank had come under the RBI scanner over the past few years for misappropriation of funds worth approximately ₹1,400 crore.
On June 18, the Anti-Corruption Bureau raided five offices of Sri Guru Raghavendra Sahakara (cooperative) Bank over misappropriation of funds.
The Criminal Investigation Department took over the case from the ACB and investigation is still underway. Officials refused to comment on the issue, saying the investigation was not over.
The RBI and the Registrar of Cooperative Societies are also looking into financial wrongdoings.
On January 10, the RBI invoked Section 35 A of the Banking Regulation Act, 1949 along with Section 56 of the Banking Regulation Act, 1949 and said the bank shall not, without prior approval of RBI in writing, grant or renew any loans and advances, make any investment or accept fresh deposits nor dispose of any of its properties.
As per reports, at the end of FY19, the bank had a paid-up capital of ₹70 crore with total deposits of ₹2,291 crore, and loan and advances of ₹1,687 crore. The deposits grew from ₹36 crore a decade ago to the current amount, and the loan and advances increased from ₹30 crore and tripled between 2014 and 2020.
When the irregularities came to light, Maiya was quoted as saying that the bank’s total NPAs currently stood at ₹372 crore from just 62 accounts. It was about one third of the bank’s total deposits and most of these loans were lent without collateral. The bank had approximately 10,000 members as part of the cooperative.
The RBI in January had capped the withdrawal limit per depositor to ₹35,000. However, it later reviewed the liquidity position and increased the limit to ₹1 lakh last month. The apex bank also said more than 54 per cent of the depositors of the bank will be able to withdraw their entire account balance.
During the investigation, the anti-corruption body had said money to the tune of ₹150 crore were lent to 60 fictitious customers.
Also, while the bank displayed its non-performing assets (NPA) as 1 per cent, the registrar of cooperatives estimated it to be anywhere between 25-30 per cent.
After the crisis hit the bank, Bengaluru South Lok Sabha member Tejasvi Surya came out in support of the depositors and assured them of safety for their money.
“I want to assure all depositors of Sri Guru Raghavendra Co-operative Bank not to panic. Finance Minister Nirmala Sitharaman is apprised of the matter and is personally monitoring the issue,” Surya had tweeted.
I want to assure all depositors of Sri Guru Raghavendra Co-operative Bank to not panic.
Hon’ble Finance Minister Smt. @nsitharaman is appraised of matter & is personally monitoring the issue. She has assured Govt will protect interests of depositors. Grateful for her concern. pic.twitter.com/pmoAcUFAu7
— Tejasvi Surya (@Tejasvi_Surya) January 13, 2020
The Karnataka High Court ordered police to investigate misappropriation of deposits in the bank. The court passed the order based on a PIL filed by K R Narasimha Murthy and three other depositors of the bank.