Branch manager, five others named in FIR; Special audit exposes irregularity
Mysuru: A case has been registered at Udayagiri Police Station over the alleged misappropriation of nearly Rs. 16 crore at the Rajivnagar branch of The Muslim Co-operative Bank in Mysuru.
According to a complaint filed by Bank’s CEO Sheikh Ibrahim (61), branch Manager Syed Mansoor (52), allegedly colluded with the bank’s then Chairman late Mir Humayun, former CEO Rafat Zareen (65), former General Manager Fazlulla Shariff (67), Salahuddin (42), owner of S.K. Steels in Udayagiri and Asgar Pasha (47) of Rajivnagar to misappropriate around Rs. 16 crore through various illegal transactions between 2009 and 2023.
Following suspicions of financial irregularities at the branch, the bank ordered a special audit. According to the audit report submitted on July 15, 2026, Rs. 13,69,40,500 had been fraudulently misappropriated through the Head Office Reconciliation Account.
Fake Fixed Deposits
The audit also found that Rs. 10 lakh had been illegally transferred towards the medical college admission fee of the daughter of former CEO Rafat Zareen. Fake Fixed Deposits worth Rs. 2.50 lakh had also allegedly been created while discrepancies amounting to Rs. 7,27,375 were detected.
The complaint further alleges that Rs. 6,28,07,000 was irregularly disbursed to Salahuddin and Asgar Pasha even before 59 cheques submitted by them were cleared.
Several of these cheques were subsequently dishonoured, but no legal action was initiated against them. The complaint alleges that transactions were part of the larger misappropriation.
11 fictitious loan accounts
The investigation also revealed that branch Manager Syed Mansoor had allegedly submitted forged documents during annual audits to conceal the irregularities. He is also accused of creating 11 fictitious loan accounts and siphoning off Rs. 1,90,44,274 through them.
According to the complaint, fake documents were systematically prepared to prevent auditors from detecting the irregularities during routine audits. The alleged fraud came to light only after the bank management ordered a special audit following suspicions of financial wrongdoing.
‘Audit report submitted to RBI’: President
A few months ago, we received information about the irregularities. We conducted an internal inquiry and initially found that around Rs. 1 crore had been misappropriated. As more irregularities came to light, we decided to conduct a special audit after obtaining approval from the Reserve Bank of India (RBI).
The audit revealed that nearly Rs. 16 crore had been misappropriated. Approval was obtained at the general body meeting held on Sept. 20 and an FIR was registered on Oct. 31 with the approval of the Board of Directors.
The special audit report has been submitted to the RBI. We are following the RBI’s recommendations on disciplinary action, legal proceedings and identification of immovable properties belonging to the accused for recovery of the misappropriated funds.
Despite the financial irregularities, the bank remains financially strong, and shareholders will not face any difficulties. Over the last two years, the bank has recorded transactions worth Rs. 16 crore and mobilised fresh deposits of Rs. 10 crore. The interest rate has also been reduced by 2 percent.
— K.C. Showkath Pasha, President, The Muslim Co-operative Bank
This post was published on November 6, 2026 7:30 pm