The Enforcement Directorate (ED) carried out a series of raids at 11 locations in the Thrissur and Ernakulam districts, targeting the activities of Abdul Salam, the former president of the Thrissur District Cooperative Bank. This operation is part of a continuing investigation into alleged fraudulent loan sanctions and money laundering linked to the now-merged Kerala State Cooperative Bank. 

Reports indicate that the raids were conducted under the Prevention of Money Laundering Act (PMLA) of 2002, during which several important documents were seized. The ED’s investigation is based on FIRs filed by the Vigilance and Anti-Corruption Bureau (Vigilance) in Thrissur, which cite multiple sections of the Indian Penal Code (IPC) and the Prevention of Corruption Act, 1998. 

The investigation has uncovered that Abdul Salam allegedly conspired with other bank officials to illegally sanction loans totalling Rs 100 crore. These loans were reportedly issued to various individuals and institutions in violation of the bank's loan manual guidelines. 

The ED’s press release stated that the raids focused on Abdul Salam's residence, as well as the offices and homes of various loan recipients. During these operations, several key documents related to the illegal loan sanctions and the diversion of funds were seized. Investigations revealed that approximately Rs 46.5 crore in loans were sanctioned during Salam’s presidency from 2013 to 2017, with the proceeds being misappropriated for unauthorised uses. 

The repercussions of these actions have resulted in a significant Non-Performing Asset (NPA) crisis, with overdue amounts totalling Rs 143.42 crore as of June 30, 2024. This mismanagement has led to considerable losses for the District Cooperative Bank in Thrissur, while also allegedly benefiting the loan recipients who obtained these illicit loans. 

In addition to the loans, the ED has identified several immovable properties belonging to the defaulting loan recipients, with an estimated current market value of Rs 70 crore, under the provisions of the PMLA. Further investigations are underway as the ED works to uncover the full extent of the fraud. 

The recent actions by the ED are part of a broader inquiry into a significant Rs 343 crore fraud case involving the Karuvannur Cooperative Bank, which is reportedly linked to the Communist Party of India (Marxist) (CPM). Approximately 40 officials took part in the raids, underscoring the seriousness of the investigations into cooperative bank operations and the allegations of money laundering. 

Image source: Economic Times