RBI told to consider depositors’ plea to raise withdrawal limit

The High Court of Karnataka on Tuesday ordered issue of notice to the Enforcement Direction (ED) in connection with a case of alleged fraud in Sri Guru Raghavendra Cooperative (SGRC) Bank Ltd., Basavanagudi, and also asked the Reserve Bank of India (RBI) to consider the plea of the depositors, mainly persons retired from services, to increase limit for withdrawing their money.

It also directed the DG&IGP to authorise a senior officer to look into the issue of delay in starting the probe by the Bengaluru police even four months after registration of the FIR on February 7, 2020

A Division Bench comprising Chief Justice Abhay Shreeniwas Oka and Justice Nataraj Rangaswamy issued the directions while hearing a PIL petition filed by K.R. Narasimha Murthy and three other depositors of the bank. Noting that the RBIinitiated action based on the outcome of the 2019 inspection report, the Bench noticed that the Registrar of Cooperative Societies, who on January 23, 2020, had written letter to the ED on suspected money laundering by those connected with the bank, had not followed up on this.

The Bench also asked authorities to examine conduct of forensic audit of the bank. Over 3,000 depositors of the Society and majority of the around 40,000 depositors had alleged they had lost their deposits due to fraud.

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