Fraud Allegations Baseless, Says Tumkur Bank GM Amid Financial Revival

Amid mounting allegations of a ₹250 crore fraud at Karnataka’s second-largest urban cooperative bank — Tumkur Grain Merchants Cooperative Bank — General Manager Rajashekar N. has dismissed the claims, calling them unfounded and aimed at discrediting the institution.

In an exclusive interview with Indian Cooperative, Rajashekar explained that ₹158.80 crore of the alleged amount relates to accounts that have already been settled and closed. The remaining accounts, he noted, are undergoing recovery under SARFAESI Act provisions.

According to him, most defaults occurred during the COVID-19 economic downturn, but no new NPAs have emerged since 2021, showing improved asset quality. He stressed that the bank is fully cooperating with ongoing investigations and remains optimistic about a favorable outcome. Over 64 internal probes have already been conducted.

He accused G.S. Basavaraju, the complainant, of misusing the situation for personal and political motives. “After facing five consecutive electoral defeats, he is now running a targeted smear campaign against the bank,” Rajashekar alleged.

On Basavaraju’s shareholding termination, the GM said it was a collective decision ratified by the AGM and board, owing to reputational harm. Nevertheless, the bank complied with the Karnataka Appellate Tribunal’s reinstatement order, honoring judicial processes.

Despite challenges, the bank has returned to profitability, reporting a gross profit of ₹25.78 crore and an expected net profit of ₹15.46 crore in FY 2024–25. With a business mix of ₹2,400 crore and CRAR at 23.92%, the bank eyes a 10% dividend this year.

However, business volumes have steadily dipped from ₹3,752 crore in FY 2019–20.

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