Why was Tejasvi Surya heckled at a recent gathering?

On April 13, Bengaluru South Bharatiya Janata Party MP Tejasvi Surya and his uncle, MLA LA Ravi Subramanya, representing Basavanagudi constituency, beat a hasty exit from a meeting with constituents after they were heckled by aggrieved depositors

Harish Venkataramaiah, a self-employed person, sold his property and deposited the ₹80 lakh amount he got from the sale in Sri Guru Raghavendra Cooperative Bank Limited (SGRCBL) in Bengaluru for the sole reason that the bank was offering an interest of 1.5 to 2% more than nationalised or private banks. With SGRCBL now under the scanner of the Enforcement Directorate (ED), the state Criminal Investigation Department (CID) and the Central Bureau of Investigation (CBI) for misappropriating depositors’ funds to the tune of ₹2,500 crore and the bank’s assets attached, Venkataramaiah is one among the 10,000 depositors, whose high-value deposits have been locked. The total number of depositors affected in the multi-crore scam is 46,000.

“Of the ₹80 lakh deposited by my wife and me in a joint account, I have got back just ₹15 lakh ( ₹7.5 lakh each as it was a joint deposit) so far. The majority of the depositors are senior citizens, who thought it would be prudent to invest their post-retirement benefits such as Provident Fund in SGRCB as it offered a higher rate of interest,” Venkataramaiah said.

Of the 46,000 direct depositors defrauded by SGRCBL, 30,000 of them got interim relief, when they were allowed by the Reserve Bank of India (RBI) to withdraw ₹35,000, enhanced to ₹65,000 after the RBI banned inward or outward financial transactions under section 35(A) of the Banking Regulation Act in January 2020. The provision in the Act authorises the RBI to initiate an insolvency resolution process for banks.

On April 13, Bengaluru South Bharatiya Janata Party MP Tejasvi Surya and his uncle, MLA LA Ravi Subramanya, representing Basavanagudi constituency, beat a hasty exit from a meeting with constituents after they were heckled by aggrieved depositors. The SGRCB located in Basavanagudi comes under Surya’s Lok Sabha constituency.

Speaking of that day, Venkataramaiah called it a “godsent opportunity” for the depositors to query Surya and his uncle, who had remained elusive all this while to the depositors seeking assistance to access their hard-earned savings. “Once we reached the venue for the Sahakara Samagama (brainstorming on the cooperative sector), the organisers informed us it was purely an election campaign meeting and that no questions would be raised. We were told that we had to just listen to Surya speak and leave,” he claimed.

However, irate depositors started questioning Surya about his promise to revive the bank and get a new investor. Videos of the meeting which went viral the next day show a woman depositor questioning Subramanya, who dismissed her query and slapped her hand, while another video has Surya leaving the venue in anger, even as some in the audience are heard saying “Answer their questions.”

What is the SGRCBL scam?

The SGRCBL was launched in 1999 by K Ramakrishna, who as its president, managed to attract depositors over a period of time, because the interest rate was marginally higher than the regular banks. According to Dr Shankar Guha Dwarakanath B, who is the honorary president of SGRCBL Thevanidarara Hitarakshana Vedike (SGRCB depositors’ protection forum), the bank was able to attract the depositors as it was located in old Bengaluru, which had a concentration of Brahmin community. Most were senior citizens who had sold their ancestral property and the proceeds were deposited in SGRCBL.

Venkataramaiah said during 2018-2019, the bank started collapsing and in January 2020, RBI imposed withdrawal restrictions on the bank after investigations revealed that ₹2,500 crore had been misappropriated by the bank’s management. The ED arrested the bank’s president Ramakrishna on February 16, 2020, under the Prevention of Money Laundering Act, with regard to misappropriation of public deposits.

In a statement following the arrest, the ED said: “During the investigation, it was found that officers and employees of the bank siphoned off money deposited by the public. The bank promised to give higher interest rates to the depositors which were not in line with the prevailing market rate. The money deposited by the depositors was advanced/siphoned off to various persons including employees of the bank without obtaining proper security of the loans. The bank officers created fictitious loan accounts and transferred the money to these accounts which, in turn, was transferred to overdue loan accounts for evergreening purposes to show strong financial health of the bank.”

According to Guha, besides the 46,000 depositors, there were 120 cooperative societies, who had kept their institutional deposits with the SGRCBL. If a society had 2,000 members, banking rules stipulate their contributions should be deposited in a cooperative bank.

Both Guha and Venkataramaiah said after RBI put a hold on the financial transactions of the bank, the Deposit Insurance and Credit Guarantee Corporation (DICGC) stepped in and as per its rules, depositors were allowed to withdraw up to ₹5 lakh from their funds, which were locked. The DICGC, a subsidiary of RBI, insures all deposits of an account holder in a bank including current, savings and others up to a maximum of ₹5 lakh.

Venkataramaiah said the SGRCBL depositors would not have been left in the lurch had the DICGC adhered to its rules that every five years, the cap on the insured amount would be doubled.

The DICGC started with ₹5,000 as the insured amount in 1965 and should have been ₹30 lakh to ₹35 lakh by now, had it not frozen the amount at ₹10,000 in 1990.

After the bank’s assets were attached, some of the societies approached the Karnataka high court, which ordered the then-BJP government to conduct a CID inquiry. “The CID has not filed any charge sheet till now,” Venkataramaiah said. When the Congress government came to power in 2023, it referred the scam to the CBI last December. “Until now, no investigation officer has been appointed and the excuse given is there are no translators. When the CBI and ED sweepdown on people overnight, why is there this delay? It’s an obvious attempt by Surya and Subramanya to scuttle the inquiry as both the investigation agencies come under the Centre’s jurisdiction,” Guha alleged.

After RBI imposed transaction restrictions on the bank on January 10, 2020, Surya convened a meeting of the depositors and assured the Centre was committed to protecting their interests. Speaking to the media later he said: “I met many depositors of the bank. To be honest, even my family has an account here. I met the finance minister Nirmala Sitharaman on January 13 and today a meeting is underway at the RBI with bank authorities and the depositors.”

Before the 2023 assembly elections were announced, Surya is said to have convened a meeting of all the depositors on April 17, 2023. “It was the day his uncle Subramanya filed his nomination papers for the assembly polls. Both came directly after the process and Surya said he has found a wonderful investor, who will revive the bank, but he cannot reveal the name because of the model code of conduct,” Venkataramaiah said.

However, after the assembly polls, the depositors have been unable to meet Surya and Subramanya, Guha said. “This bank was designed to fraud depositors. The bank’s president Ramakrishna campaigned for Surya in the 2019 Lok Sabha polls.”

According to Venkataramaiah, when they tried to approach the ED, the depositors were told that it does not entertain individual complaints and that whatever reports have to be sent will be to the appropriate authorities.

The April 13 incident has come in handy for the Congress which said in a post on X: “BJP’s Tejasvi Surya has once again escaped from the crowd through the Emergency Exit Door.” Surya alleged that Congress sent hooligans to the meeting to create a ruckus. “One of them shared a video to incite chaos during the meeting. The person in the video isn’t even a depositor, but a Congress worker who came to the meeting to cause trouble,” he claimed. Both parties have approached the Election Commission with complaints. The depositors, however, continue to await justice.

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