Kochi: The RBI has closed the Mythri Scheme, a recurring deposit scheme operated by the Ernakulam Social Service Society (ESSS) of the Varappuzha archdiocese, for the alleged diversion of investors' money to mutual funds without their knowledge.

The RBI move comes after it was found that the ESSS had diverted Rs 4.25 crore into mutual funds for which the society was getting a dividend of Rs 25-30 lakh per year. However, the society members were not given any payouts from the dividends. The RBI has forwarded the case to the economic offences wing of the state police for a detailed probe. The Mythri Scheme (Mythri Credit Union Rural Women Banking) had been running for the last 25 years.

Ironically, the scam came to light after a scrutiny of the ESSS balance sheet filed before the Registrar of Society. As per the balance sheet filed for the year ending March 31, 2015, Rs 4.25 crore was shown under the head "investments in mutual funds". Subsequently, the RBI served a notice directing to stop the scheme forcing the ESSS to close all the accounts and return the capital with acquired interest to its members totalling around 30,000.

"The ESSS has served notices to all the 70 parishes under the diocese, announcing the closure of the scheme before announcing the launch of a new one. However, the ESSS has not mentioned about the circumstances, which led to the closure. While the notice said that the capital will be returned to the members, the ESSS was mum about the dividends they had earned from the deposit money," said Jacob Santhosh an RTI activist who had brought the issue to RBI's attention.

"In a public notice, the ESSS has admitted that the scheme was running for the last 25 years. So, on an average if they have received a dividend of Rs 25 lakh per year, it would amount to Rs 6.25 crore now. When added to the investment of Rs 4.25 crore, the money earned by the ESSS comes close to around Rs 11 crore," said Santhosh.

ESSS director Fr Antony Raphel Komaranchath said the society was not aware of RBI regulations restraining investment in mutual funds and hence stopped the scheme after getting an order from the RBI. However, he did not say whether the ESSS would give a share of the dividend to members of Mythri scheme.

Meanwhile, Joint Christian Council, a forum of laities, has demanded that archbishop of Varappuzha should take action against office bearers of the ESSS.



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