In a major breakthrough in the Rs560 crore Karnala Nagari Sahakari Bank fraud case, the Enforcement Directorate (ED) has restituted immovable assets valued at Rs386 crore to the Competent Authority appointed under the Maharashtra Protection of Interest of Depositors (MPID) Act. This significant step is aimed at compensating over five lakh depositors, many of whom are senior citizens and small investors, who lost their savings following the collapse of the bank.
The assets, which will now be auctioned, were previously provisionally attached by the ED during a money laundering investigation. These properties, located across Panvel and Raigad districts, were acquired using funds siphoned through bogus loans in violation of Reserve Bank of India (RBI) regulations.
The case traces back to an FIR filed in February 2020 by the Economic Offences Wing (EOW), CID, Pune. The chargesheet accuses former Karnala Nagari Sahakari Bank chairman Vivekanand Shankar Patil and other senior officials of criminal conspiracy. They allegedly created 63 fictitious loan accounts using forged documents to divert approximately Rs560 crore into entities controlled by Patil, including the Karnala Charitable Trust and Karnala Sports Academy.
The ED’s probe found that the laundered money was funneled through these fake accounts and used for constructing sports and educational infrastructure and other personal investments, falsely portrayed as legitimate assets.
Vivekanand Shankar Patil, a four-time legislator and former Maharashtra Legislative Council member, was arrested in 2021 under the Prevention of Money Laundering Act (PMLA) and has remained in judicial custody since. The attached properties include a multi-acre sports complex in Panvel and prime land in Posari, Raigad.
Following an application by the RBI-appointed liquidator and ED’s support, the Special PMLA Court authorized auctioning these assets on July 22, 2025. Proceeds from the sale will be used to repay depositors, who had entrusted the bank with Rs553 crore in deposits.
With this restitution, authorities aim to mitigate the financial loss suffered by the depositors and bring some relief to the victims of this major cooperative bank scam.
