100 People Defrauded by a Cooperative Bank in Ahmedabad
Over 100 people took loans against property in Ahmedabad
Ahmedabad-based Colour Merchants Cooperative Bank has been accused of defrauding over 100 people, with police officials stating that over 100 people have sent complaints to the commissioner’s office. Most victims claim they applied for loans against property with the bank in 2018 and 2019, but they claim they were not intimated when the loans were sanctioned. Soon after the money was credited to their accounts, the borrowers say, their accounts were fraudulently drained through security checks they had given to the banks at the time of the loan application.
Multiple bank statements of borrowers showed large sums of money withdrawn from accounts in a short period of time. Hardik Patel, who applied for a Rs 34 lakh loan in August 2019, claimed he did not receive any intimation on his phone from the bank. Between 8 August 2019 and 29 November 2019, Patel’s bank account was drained completely through various RTGS (real-time gross settlement) transactions and cheques.
The bank is currently under RBI restrictions over its “deteriorating financial condition.” The alleged modus operandi in all cases has been similar, with small businessmen getting in touch with a middleman by the name of Chintan Shah and approaching Colour Merchants Cooperative Bank for a loan against property. The amount stolen from Patel’s bank allegedly went from one account to another before finally ending up in the account of bank proprietor Vishwa Khanna, who died of Covid in 2020.
In June 2023, Patel, along with three others, stood up in the Gujarat High Court and started drinking phenyl in an attempt to end their lives. Color Merchants Bank was initially the subject of a First Information Report (FIR) filed in the case of Jayshree Ben, who was also charged with fraud. Of the seven FIRs, two have resulted in the filing of charge sheets: one against Rajguru and one against Patel.
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In December 2021, Sandesh Newspaper reported on AtulBhai Kadia, a labour contractor who was harassed by recovery agents from Colour Merchants Bank to pay off his debt. Kadia had applied for an ongoing loan of Rs 20 lakh in February 2018, but claims he never got the money. He received harassment and threats every other day from recovery agents. Many customers of Colour Merchants Bank formed WhatsApp groups to figure out their next steps. Kadia still doesn’t have access to his bank documents like a passbook.
Several complainants in Ahmedabad have either been stripped of their property or have been threatened with it. Patel’s house was taken on 25 May 2022 by the bank, and within two weeks, it was sold and auctioned. Bank auctioned off properties in order to recoup loans; letters have been sent to other borrowers under applicable parts of the SARFAESI Act. All the affected parties have challenged their possession notices at the Debts Recovery Appellate Tribunal, where their cases are ongoing.
For now, depositors at Colour Merchants Bank wait for justice. Nitin Rajguru, who has a catering business in Ahmedabad, claimed that he had an ongoing Rs 65 lakh loan with the bank when he was offered a top-up in November 2019. He learned that a fresh loan of Rs 55 lakh was deposited in his account between 29 November and 23 January.
Conclusion
Urban cooperatives in Gujarat have seen a precipitous decline in depositors—more than nine lakh since 2002 and the news from Colour Merchants Bank has only served to worsen the situation. Nationalized banks offer easy loans now, with better technology to offer citizens and the money is considered safe. People are not preferring to spend their money with urban cooperatives anymore. Property Watcher helps you keep your property and investment safe. Stay tuned with us for more news about property.