• FIR against CEO and three bank employees over Rs. 2.20 crore loan
• Loan sanctioned without proper documents; four officials suspended

Mysuru: In a serious case of financial irregularities at a city-based prestigious Co-operative Bank, a Rs. 2.20 crore loan was allegedly disbursed to a customer despite his application being rejected by the Bank’s Loan Sub-Committee and Management Board.

The alleged irregularity has led to a Police complaint against four officials of Sri Kanyakaparameswari Co-operative Bank Ltd. (SKPC-Bank) at K.R. Circle, Mysuru.

Bank President B. Nagesh lodged the complaint with the Devaraja Police, based on which an FIR (No. 63/2026) has been registered under relevant sections of Bharatiya Nyaya Sanhita, 2023 (BNS), pertaining to criminal breach of trust by a public servant, banker or merchant, cheating and dishonestly inducing delivery of property and joint liability.

Nagesh has named the CEO of the Bank, Y.P. Naresh, Branch Manager J. Sathyanarayana Shetty, Senior Assistant M. Parashiva and Junior Assistant Karthik as the accused. The loan applicant, G. John, a resident of Vijayanagar First Stage, has also been named in the complaint.

Nagesh has alleged that the officials colluded to bypass the Bank’s procedures and caused a financial loss to the institution. As a disciplinary measure, the Bank has suspended Naresh, Sathyanarayana Shetty, Parashiva and Karthik.

Loan application and scrutiny

Nagesh, who has been serving as the Bank’s President for the past nine months, stated in his complaint that John had applied for a property-backed loan of Rs. 2.40 crore.

The Bank’s loan team scrutinised the application and raised several objections, noting that the required documents had not been submitted in full.

The application was placed before the Loan Sub-Committee at its meeting on July 9, 2026. As the documentation was incomplete, the Sub-Committee recommended that the matter be placed before the Management Board.

At the Management Board meeting held on July 10, the required documents were still not available and the Loan Sub-Committee had not cleared the proposal. The Board unanimously decided to leave the matter to the discretion of the Board, according to the complaint.

Property visit, loan rejection

Nagesh stated that he, CEO Naresh, Senior Assistant Parashiva and Director Venkatesh subsequently visited the applicant’s property. They did not give any assurance regarding the loan and informed the applicant that the proposal could be considered only after all the pending documents were submitted.

At the Management Board meeting on July 13, the loan application was unanimously rejected as the required documents had not been furnished.

The President also posted messages in the Bank’s WhatsApp group, ‘SKPCB-BOD & CEO,’ instructing that the loan should not be sanctioned. In response, CEO Naresh reportedly stated that the loan process had already been initiated, but further disbursement had been blocked.

According to Nagesh, some Directors questioned why the loan process had been initiated when the Loan Committee had not approved the proposal. They also demanded that an emergency Management Board meeting be convened. However, the CEO did not convene such a meeting, the complaint stated.

Rs. 2.20 crore disbursed

Despite the rejection, Nagesh alleged that CEO Naresh, Branch Manager Sathyanarayana Shetty, Senior Assistant Parashiva and Junior Assistant Karthik opened a savings account in John’s name, bearing account No. 001050100020440.

According to the complaint,  Rs. 2.20 crore was disbursed to the account on July 18, 2026.

The applicant allegedly withdrew and transferred the money in cash and to other Bank accounts between July 18 and Aug. 7. Nagesh alleged that the transactions resulted in financial loss to the Bank.

Loan file not produced

Further questions were raised during subsequent Management Board meetings. At the Board meeting on July 29, CEO Naresh allegedly failed to produce the loan file for scrutiny, while Senior Assistant Parashiva was on leave.

On Aug. 10, Naresh reportedly replied to a show-cause notice issued by the Bank President, stating that some incorrect information had been conveyed and that he had asked the Branch Manager on Aug. 5 to clarify the matter.

Again, at the Joint Board and Management meeting held on Aug. 14, the loan file was not produced. Senior Assistant Parashiva was also absent from duty on that day too, according to the complaint. The loan sanction file was also not produced before any higher authority, Nagesh alleged.

The Bank President stated in his complaint that the loan had been rejected by the Loan Sub-Committee, Management Board and Administrative Board, but the accused officials nevertheless allegedly opened a savings account in the applicant’s name and disbursed Rs. 2.20 crore.

Nagesh has sought legal action against Naresh, Sathyanarayana Shetty, Parashiva and Karthik for alleged misappropriation, fraud and other financial irregularities.

‘More documents sought’

Devaraja Police have registered an FIR based on the complaint and begun examining the allegations and transactions relating to the loan.

“We have not arrested anyone so far and all the accused have been cooperating with the investigation. We have received certain documents pertaining to the case and have sought more transaction documents and records,” a Police source told Star of Mysore.

Rs. 65 lakh misuse case still pending even after 10 years

Speaking to Star of Mysore, Sri Kanyakaparameshwari Co-operative Bank Ltd. (SKPC-Bank) President B. Nagesh said, the Police and the Bank Management have initiated a probe into the financial irregularity involving the disbursement of a loan of Rs. 2.20 crore without proper documentation.

“We have suspended the Bank’s CEO Y.P. Naresh, Branch Manager J. Sathyanarayana Shetty, Senior Assistant M. Parashiva and Junior Assistant Karthik,”  he confirmed.

Nagesh said, no replacements had been appointed so far for the suspended officials and the existing staff were handling the additional workload.

The Bank, established in 1932, has hundreds of depositors, with a large number of traders operating in the Central Business District maintaining accounts and deposits with the decades-old institution.

The latest incident has also caused concern among account holders, particularly as it comes in the wake of an earlier fraud case at the same Bank about a decade ago. Around Rs. 65 lakh was allegedly misused in that case.

The matter is yet to be resolved and remains pending in Court, with recovery of the assets also pending.