ED raids 19 locations in probe against Bihar bank linked to RJD leader for fraud

The federal agency is probing money laundering allegations in connection with loan fraud at Vaishali Shahari Vikas Cooperative Bank

PATNA: The Enforcement Directorate (ED) on Friday conducted searches at 19 locations across four states in connection with a ₹85 crore loan fraud case in which former Bihar minister and Rashtriya Janata Dal (RJD) leader Alok Kumar Mehta is an accused.

Security personnel stand guard during a raid by the Enforcement Directorate at premises linked to RJD MLA and former Bihar minister Alok Kumar Mehta. (PTI)

The federal agency is probing money laundering allegations in connection with the loan fraud at Vaishali Shahari Vikas Cooperative Bank (VSVCB) founded by Mehta’s father back in the 1980s. The fraud was detected during an inspection by a Reserve Bank of India (RBI) team which allegedly found evidence of the bank disbursing loans worth ₹85 crore to 383 fake beneficiaries between April 2020 and December 2022.

A first information report (FIR) was registered by Vaishali’s Town police station against the bank manager Syed Shahnawaz Wazih, chief executive officer Vipin Tiwari and chairman Sanjeev Kumar the Town police station of Vaishali district.

On December 30, RBI cancelled the licence of the bank and ordered it to stop banking operations.

According to an ED official, Friday’s raids were carried out at nine locations in Bihar’s Patna and Hajipur, one location in Delhi, five in Kolkata, and four in Uttar Pradesh.

ED officials said cold storage firms run by Alok Mehta also were under the agency’s scrutiny. Apart from the RJD leader, the searches also covered other bank functionaries.

Friday’s raids come amid speculation that Alok Mehta was being considered for a promotion in the state unit and could replace Jagadanand Singh when he steps down at the executive committee meeting on January 18.

Alok Mehta represents Ujiarpur assembly seat in the Bihar assembly and has served as minister for revenue and land reforms between August 2022 and January 2024 when the RJD was part of the Nitish Kumar-led coalition government. He was also a Lok Sabha member from Ujiarpur constituency.

VSVCB, the bank at the centre of the ED probe, was founded by Alok Mehta’s father, Tulsi Das Mehta, an influential backward community leader. Alok Mehta succeeded his father as chairman in 1995 and held the position until 2012. Currently, Alok’s nephew, Sanjeev Mehta, is listed as the cooperative bank’s chairman.

Mehta and the RJD have not commented on the raids. JD(U) leader Neeraj Kumar said it was not a surprise since RJD leaders have a history of financial misconduct. “The allegations against RJD leaders for being involved in corrupt practices are not new,” he said.