Bengaluru bank fraud: 127 sold plots mortgaged in alleged Rs 961 crore scam
Sri Guru Raghavendra Sahakara Bank Niyamitha, which collapsed five years ago, faces fresh allegations after 127 plots in a Bangalore Development Authority-approved layout were mortgaged despite having been sold to buyers. The outstanding amount on the mortgaged property is Rs 961 crore, and bank off
More than five years after Sri Guru Raghavendra Sahakara Bank Niyamitha in south Bengaluru went bust, fresh allegations of fraud have emerged involving 127 residential plots in a Bangalore Development Authority-approved layout that were mortgaged to the bank after already having been sold to unsuspecting buyers. The outstanding amount against the mortgaged property stands at Rs 961 crore, though the bank does not have accurate information on the value of the collateral.
The properties in question are in Sri Shankara Layout in Kambipura village, Kengeri hobli of Bengaluru, and are spread across 45 to 50 acres. The layout has a registered residents’ welfare association, whose members say they only recently learnt of the mortgage. On 16 Jul 2026, the association wrote to the bank administrator stating that between 2011 and 2015 absolute sale deeds had been executed by the developers in favour of each of the 127 plot buyers.
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, and claimed the case involved criminal breach of trust by the developers, allegedly in connivance with bank officials. It urged the administrator not to initiate any proceedings that might damage the homeowners’ interest, rights or physical possession of their plots.
A notice issued by the bank to the layout’s developers in January 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 is Rs 961 crore. Bank officials, speaking on condition of anonymity, told TOI that in 10 to 15 property mortgage cases the then officials had attached “unsecured” loans to evade audit lacunae, creating “rollover accounts” where unsecured loans were attached to mortgaged properties.
In the Shankara Layout case, 23 people apart from the original loan recipients were given money, including individuals and companies. 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, one senior official said. The farthest property mortgaged to the bank is in Chintamani, Kolar.
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,” officials said, adding that the plot owners were sending their documents individually to the bank.
