ED Launches First-Ever Raids in Andaman in ₹200 Crore Bank Fraud Probe
In a landmark move, the Enforcement Directorate (ED) on Wednesday conducted its first-ever raids in the Andaman and Nicobar Islands as part of a widening money laundering investigation linked to a ₹200 crore financial scam. The case centers around alleged irregularities in loan disbursals by the Andaman and Nicobar State Cooperative Bank (ANSCB), a key financial institution in the island territory.
The raids were executed at 11 different locations—nine in and around Port Blair and two premises in Kolkata. The ED’s investigation follows a First Information Report (FIR) filed by the Crime and Economic Offences Wing of the Andaman and Nicobar Police, which flagged suspicious lending practices and named both private individuals and senior bank officials.
According to the ED, its probe has unearthed serious financial misconduct, where the cooperative bank allegedly provided loan and overdraft facilities to a network of shell companies. These entities, investigators say, were created specifically to divert public funds under the guise of legitimate financial operations.
Shell Companies Used to Route Illicit Funds
Preliminary findings suggest that nearly 15 such companies were established to fraudulently obtain loans from the bank. ED officials claim that the loan approval process violated established banking norms, with the entities receiving large sums despite lacking proper collateral or viable business models.
Large portions of these funds were reportedly withdrawn in cash and channeled into undisclosed personal accounts, raising alarms about the extent of the laundering operation. The ED suspects that the main beneficiary of these dubious transactions is Kuldeep Rai Sharma, a political figure and the former Member of Parliament representing Andaman and Nicobar Islands.
Sharma, who also holds the post of Vice-Chairman of ANSCB, is now at the center of the controversy. His dual role has led to growing concerns over conflict of interest and alleged misuse of authority. The ED is exploring whether Sharma’s position within the bank facilitated the approval of illegal loans and whether he personally received illicit gains.
Raids Reveal Incriminating Evidence
During the search operations, ED teams seized a range of evidence including bank documents, digital records, and communications that allegedly confirm the existence of a laundering network. According to agency sources, several transactions appear to have been deliberately disguised to bypass regulatory checks.
“Substantial cash withdrawals, unexplained fund transfers, and shell entities with no real business operations are clear indicators of money laundering,” a senior ED official said. “The evidence points toward systematic abuse of banking protocols for personal enrichment.”
Investigators believe that the cooperative bank was effectively exploited as a conduit for siphoning off public funds. The probe also reveals a potential nexus between political influence and banking malpractices, especially within institutions that are subject to limited oversight due to their local or semi-autonomous status.
Historic Action Highlights ED’s Expanding Reach
The Port Blair raids mark the first time the Enforcement Directorate has conducted a search operation in the Andaman and Nicobar Islands—a territory that, until now, has remained largely outside the purview of high-profile financial investigations. The move underscores the agency’s intent to widen its enforcement net and scrutinize financial activities even in India’s most remote administrative regions.
“The message is clear—no part of the country is beyond the reach of financial law enforcement,” said an official involved in the operation.
The ED has indicated that further action, including summons and arrests, may follow as the investigation progresses. For now, the spotlight remains on the cooperative bank’s top brass and the political figures allegedly connected to the fraudulent loan scheme.
As forensic audits and interrogations continue, the case is expected to set a precedent for future probes into cooperative banks—an area long regarded as vulnerable to financial manipulation and local-level corruption.
