ED Returns Rs 386 Crore in Properties to Compensate Victims of Rs 553 Crore Karnala Bank Fraud

Mumbai: In a significant development for over five lakh aggrieved depositors, the Enforcement Directorate (ED), Mumbai, has returned immovable properties worth ₹386 crore to the Competent Authority under the Maharashtra Protection of Interests of Depositors (MPID) Act. This move comes as part of efforts to recover losses incurred in the ₹553 crore fraud involving Karnala Nagari Sahakari Bank Ltd., Panvel.

The ED had attached multiple properties during its investigation under the Prevention of Money Laundering Act (PMLA), following revelations of large-scale financial misappropriation at the cooperative bank. According to officials, the scam involved the creation of bogus loan accounts, falsified documents, and the systematic siphoning of public funds by senior officials, including the bank’s chairman.

Following the money trail, the agency uncovered several immovable assets acquired using the proceeds of the crime. These were provisionally attached and have now been officially returned to the Competent Authority to initiate distribution and recovery proceedings in accordance with the MPID Act.

A senior ED official said, “This is a major step towards ensuring justice to the common depositors whose hard-earned money was looted. We are committed to taking strict action against financial fraud and recovering assets for victims.”

The Karnala Nagari Sahakari Bank scam came to light after depositors raised complaints about being denied access to their funds. A forensic audit and subsequent probe exposed the depth of the conspiracy, which included large loans issued to shell companies and benami entities without adequate collateral or documentation.