• Industry
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Over ₹960 crore scam? 127 plots sold, then mortgaged to scam-hit bank in Bengaluru

Fresh allegations of fraud have emerged related to Sri Guru Raghavendra Sahakara Bank Niyamitha involving mortgaged properties. Properties with ongoing financial disputes had previously been sold to unsuspecting buyers, exposing a troubling issue. The bank lacks accurate data on these properties, complicating efforts to determine ownership and value. An association representing affected homeowners has urged the bank to halt any further actions against their interests.

In one case, the outstanding amount against the mortgaged property is Rs 961 crore even though the value of the collateral is not known.

According to officials, 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. The farthest property mortgaged to the bank is in Chintamani, Kolar.

Documents in possession of TOI show a Bangalore Development Authority-approved Sri Shankara Layout in Kambipura village, Kengeri hobli of Bengaluru, was mortgaged along with 127 plots that had already been sold to innocent individuals.

The layout has a registered residents’ welfare association, whose members say they learnt of the mortgage only recently.

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.

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.

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.

“These accounts are being termed ‘rollover accounts’, wherein unsecured loans were being attached to mortgaged properties. While the actual loan recipient would have received Rs 10 to Rs 12 crore, the rest of the loan amount was given out to other people,” said one senior bank official.

In the case of Shankara Layout developers, 23 people apart from the original loan recipients were given money. Beneficiaries of these loans include individuals and companies.

On Shankara Layout, bank officials said they would take a factual position on whether the Sri Shankara Layout plots were sold before or after the land was mortgaged in 2019. “Properties sold prior to the mortgaged dates cannot be included in the recovery process,” said officials, adding that the plot owners were sending their documents individually to the bank.