Bengaluru: More than five years after Sri Guru Raghavendra Sahakara Bank Niyamitha in south Bengaluru went bust leaving hundreds of depositors in dire straits, fresh allegations of fraud have come to light, with properties already sold to unsuspecting buyers having been mortgaged with the bank.
The bank does not have accurate information about the value of these properties, which are spread across the city and cover 45 to 50 acres, according to officials. On July 16, 2026, the layout owners’ welfare association wrote a letter to the administrator of Sri Guru Raghavendra Sahakara Bank Niyamitha and said that between 2011 and 2015, there was an absolute sale deed executed by the developers of the layout with each of the 127 individuals. The letter acknowledged as received by the bank administrator said two mortgage deeds registered and dated Oct 31, 2019, and two rectification deeds of Nov 28, 2019… along with residential plots formed on them in entirety, were shown as collateral security to your bank which was then represented by then chief advisor M Vasudev Maiya to obtain huge amounts of loans from the bank. A notice issued by the bank to the layout’s developers in Jan 2026 said loans totalling Rs 739 crore and 87 lakh had been raised by mortgaging the property to various persons. With interest, the outstanding amount was Rs 961 crore.
Bank officials, on condition of anonymity, told TOI that in as many as 10 to 15 cases of property mortgages, the then bank officials had attached “unsecured” loans to evade audit lacunae. The farthest property mortgaged to the bank is in Chintamani, Kolar. The association asked how the bank could have accepted the plots as collateral when absolute sale deeds had already been executed in the buyers’ favour. It claimed the case involved criminal breach of trust by the developers, allegedly in connivance with bank officials at the time. The association urged the bank administrator not to initiate any proceedings or take steps which may damage or dent their interest, rights and stake over the physical possession of their respective residential plots.