ED finds ₹550 crore fraud at Kerala co-op banks after 17-premises search
Synopsis
The Enforcement Directorate searched 17 premises across four Kerala districts and found massive loan fraud — fake applicants, forged death certificates, properties mortgaged without owners' consent, and funds diverted to benami accounts. The Kochi Zonal Office is now tracking ₹550 crore in suspected proceeds of crime across 27 co-op fraud cases, making this one of the largest such enforcement sweeps in Kerala's co-operative banking sector.
Key Takeaways
The ED searched 17 premises across Ernakulam, Malappuram, Kozhikode and Thrissur on 8 October 2025 under the PMLA .
Three banks are under investigation: Urban Co-operative Society, Angamaly ; Thennala Service Co-operative Bank , Malappuram; and Kuttanellur Service Co-operative Bank , Thrissur.
In the Angamaly case, serious irregularities were found in 159 loans worth ₹33.82 crore out of 422 loans totalling ₹96.74 crore ; two fixed deposits worth ₹1.82 crore were frozen.
In the Malappuram case, alleged fake Kisan Credit Card loans were sanctioned to fictitious members; suspected proceeds of crime estimated at ₹10 crore ; 20 accounts holding ₹24.50 lakh frozen.
In the Thrissur case, properties were allegedly mortgaged without owners' knowledge using forged documents; financial loss estimated at over ₹27 crore .
The ED Kochi Zonal Office is investigating 27 co-operative fraud cases involving approximately ₹550 crore in suspected laundered funds.
The Enforcement Directorate (ED) has uncovered major irregularities in loan transactions at three co-operative banks in Kerala, following searches at 17 premises across Ernakulam, Malappuram, Kozhikode and Thrissur on Wednesday, 8 October 2025. The agency's Kochi Zonal Office is currently probing 27 co-operative society and bank fraud cases involving approximately ₹550 crore in suspected proceeds of crime, according to an official ED statement.
Key Developments Across Three Cases
The searches were conducted under the Prevention of Money Laundering Act (PMLA) in connection with three separate investigations — the Urban Co-operative Society, Angamaly; the Thennala Service Co-operative Bank in Malappuram; and the Kuttanellur Service Co-operative Bank in Thrissur. Each case involves distinct patterns of alleged fraud, from phantom loan applicants to forged property documents.
Angamaly Case: ₹96.74 Crore in Loans, Serious Flaws in 159
In the Urban Co-operative Society, Angamaly case, the ED searched five premises in Ernakulam and surrounding areas. The investigation stems from an FIR registered by the Angamaly Police, which alleged fake loan applications, loans sanctioned to ineligible persons, and misappropriation of society funds — with the alleged fraud estimated at around ₹55 crore.
The ED found that 422 loans worth approximately ₹96.74 crore had been sanctioned against 108 properties belonging to 65 members. Of these, serious irregularities were detected in 159 loans worth roughly ₹33.82 crore. Irregularities included the absence of original title deeds, use of photocopies of property documents, missing registered mortgages, and loans allegedly sanctioned in the names of ineligible or non-existent persons. Documents relating to 38 properties, digital devices, and mobile phones were seized. Two fixed deposits worth approximately ₹1.82 crore were frozen.
Malappuram Case: Fake KCC Loans, Customers Denied Returns
In the Thennala Service Co-operative Bank case, the ED searched seven premises linked to former office-bearers and directors across Malappuram and Kozhikode. The probe follows 10 FIRs registered by the Kottakkal Police, with around 53 additional FIRs filed in 2023 and 2024 in and around Kottakkal.
The bank had allegedly promised higher returns on fixed deposits, but customers reportedly did not receive their principal amounts or returns after maturity. The ED also found alleged irregularities in Kisan Credit Card (KCC) and land-backed loans — with fake KCC loans allegedly sanctioned to fictitious and benami members. Some loans were allegedly sanctioned beyond prescribed limits and without required approvals, with funds allegedly diverted to deposits, repayment of earlier liabilities, and other unauthorised transactions. The suspected proceeds of crime in this case are estimated at around ₹10 crore. The ED froze 20 fixed deposits and bank accounts holding approximately ₹24.50 lakh.
Thrissur Case: Forged Documents, Properties Mortgaged Without Owners' Knowledge
In the Kuttanellur Service Co-operative Bank case, the ED searched five premises in Thrissur and nearby areas linked to former office-bearers and officials. The case follows four FIRs registered by the Ollur Police relating to alleged cheating and use of forged documents.
According to the ED, properties belonging to bank customers were allegedly mortgaged as collateral for loans without their knowledge or consent, with loans sanctioned in the names of third parties. Forged death certificates, identity documents, and valuation reports were allegedly used. Board members allegedly granted membership to persons outside the bank's jurisdiction and extended loans to them through illegal means. Property collateral values were allegedly inflated. The ED estimates the alleged transactions caused a financial loss of more than ₹27 crore to the bank. Digital evidence and related documents were seized during the searches.
What Happens Next
The ED has confirmed that further investigation is in progress across all three cases. The scale of the Kochi Zonal Office probe — spanning 27 fraud cases and nearly ₹550 crore in suspected laundered funds — signals a sustained enforcement push into Kerala's co-operative banking sector, which has faced recurring scrutiny over governance lapses. With searches, seizures, and account freezes already underway, formal arrests and attachment of proceeds of crime are likely next steps as the PMLA investigations progress.
Point of View
Phantom KCC borrowers, properties mortgaged without owners' awareness — points to institutional capture rather than rogue individuals. The harder question, which the PMLA investigation must eventually answer, is who benefited politically and financially from decades of regulatory blind-spots in this sector.
NationPress
8 Oct 2026
Frequently Asked Questions
What did the ED find in its Kerala co-operative bank raids?
The ED found major loan irregularities across three co-operative banks in Kerala — including fake loan applications, loans sanctioned to non-existent persons, forged documents, and properties mortgaged without owners' knowledge. The searches on 8 October 2025 covered 17 premises across Ernakulam, Malappuram, Kozhikode, and Thrissur.
How much money is involved in the Kerala co-operative bank fraud?
The ED's Kochi Zonal Office is investigating 27 co-operative fraud cases involving approximately ₹550 crore in suspected proceeds of crime. The Angamaly case alone involves alleged irregularities in loans worth ₹33.82 crore, and the Kuttanellur case is estimated to have caused a loss of over ₹27 crore.
Which banks are under ED investigation in Kerala?
Three institutions are under investigation: Urban Co-operative Society, Angamaly (Ernakulam); Thennala Service Co-operative Bank, Malappuram; and Kuttanellur Service Co-operative Bank, Thrissur. All three cases are being probed under the Prevention of Money Laundering Act (PMLA).
What action has the ED taken so far?
The ED has seized documents relating to dozens of properties, digital devices, and mobile phones. It has frozen two fixed deposits worth ₹1.82 crore in the Angamaly case and 20 fixed deposits and bank accounts holding about ₹24.50 lakh in the Malappuram case. Further investigation is ongoing.
What were the irregularities in the Kuttanellur co-operative bank case?
In the Kuttanellur Service Co-operative Bank case, properties were allegedly mortgaged as loan security without the owners' knowledge or consent, loans were sanctioned in the names of third parties, and forged death certificates, identity documents, and valuation reports were allegedly used. The estimated financial loss to the bank exceeds ₹27 crore.
