Two top officials of the defunct Pen Urban Cooperative Bank in Maharashtra’s Raigad district have been arrested by the Enforcement Directorate (ED) for allegedly routing Rs 774 crore of public funds for personal gains.

Shishir Dharkar, a former chairman of the bank, and expert director Prem Kumar Sharma were arrested for embezzlement of funds under the provisions of the Prevention of Money Laundering Act (PMLA), according to the ED.

“The duo are the main conspirators as well as beneficiaries of the money laundering scam that was carried out at the bank between 2001 and 2010,” the agency has said in a statement.

The agency also said that they opened 685 fake loan accounts in various branches of the bank by manipulating bank records and pulled out the funds for personal gains. They added that at the time of the closure of the bank, the total outstanding in these loan accounts was Rs 774 crore.

The siphoned-off funds were used either to buy immovable properties, or pay earlier non-performing assets (NPAs) or taken out as cash through cheques or demand drafts discounting for personal benefits, the statement said.

Over 100 acres of landed properties worth over Rs 22 crore have been purchased in the name of third parties using the funds, it said, adding that the land is already attached by the ED.

Over 2 lakh depositors of the bank, which has its headquarters in the tehsil town of Pen, have been reportedly impacted as a result of the “fraud” and have been demanding relief from authorities for many years now, it stated.