Thrissur: The efforts to revive the Karuvannur Cooperative Bank, reeling under the Rs 227 crore financial fraud charges, have suffered a major setback with the real estate dealers stopping repayment of loans running to crores.
The real estate agents in the Irinjalakuda town and Karuvannur region alone have loan dues of over Rs 50 crore. As the financial scandal was exposed, they suddenly stopped making repayments. As per the latest information, most of such loans were arranged based on the intervention of Kiran, the main conspirator in the Karuvannur bank scam and the fourth accused in the case.
The bank had sanctioned loans of over Rs 22 crore without sufficient collateral documents and not adhering to laid-down norms, with Kiran acting as the middle agent, the probe has found. Loans up to Rs 50 lakh were extended to individuals by pledging buildings in violation of cooperative society rules and also pledging the same property in the names of many. Though such persons were making timely repayment of the loans, they have stopped doing the same since the scandal was exposed. Since the loans were passed in violation of the norms, the bank is legally prohibited from taking over the assets used as collateral.
High court seeks status of probe
The Kerala High Court has directed the state government to inform it of the present status of the probe into the Karuvannur bank scam case. Earlier, the bank and the state government opposed the petition, which the court will again consider after a week.
Last year the bank's CPM-led governing council was sacked and it was placed under the watch of an administrator as the fraud came to light. Before that several borrowers received recovery notices for amounts greater than they had borrowed.
The borrowers approached the Registrar of Cooperatives and a probe unearthed a multi-crore scam. The irregularities at the bank are pegged at Rs 300 crore, but the government estimates it to be only Rs 150 crore.
