The Enforcement Directorate (ED) has arrested Vivekanand Shankar Patil, Chairman of Karnala Nagari Sahakari Bank, Panvel, Raigad, Maharashtra, in a bank fraud case worth over Rs 500 crore.
The fraud came to light after an audit was done at the behest of the Reserve Bank of India in 2019-20.
The audit revealed that Patil was siphoning off funds since 2008 from the bank through 63 fictitious loan accounts of Karnala Charitable Trust and Karnala Sports Academy, which were founded by him, the agency said.
No collateral securities were taken against such loans and no correspondence was made with the revenue authorities regarding payment of stamp duty for the purpose of purchasing immovable properties for which loans were obtained, thereby making the loans unsafe/unsecured, it said.
Further, all the above loan accounts that were used for transferring funds to the said trust, were found to be non-performing asset (NPA).
It was further observed that without following KYC norms and other RBI guidelines, the said loans were sanctioned and disbursed at the instruction and for gains by Patil, the agency alleged.
Patil was produced before the Special Court for PMLA cases in Mumbai on Wednesday. The court granted his custody till June 25.