Sri Vijaya Puram, Sept. 5: K. Murugan, former Managing Director of the Andaman and Nicobar State Cooperative Bank (ANSCB) and an accused in the alleged ₹500-crore-plus loan fraud case involving the lender, passed away at G.B. Pant Hospital in Sri Vijaya Puram on Saturday.
Murugan, a resident of Delanipur, had been battling serious health complications for some time. He had been granted bail on medical grounds by the Circuit Bench of the Calcutta High Court at Port Blair in February 2026.
Murugan was among the key former officials of ANSCB who came under investigation over alleged irregularities in the sanctioning and disbursement of loans by the cooperative bank.
The case, which emerged as one of the biggest financial investigations in the Andaman and Nicobar Islands, involved allegations that loans worth hundreds of crores were sanctioned through more than 100 accounts linked to various firms and entities in violation of banking procedures.
The investigation was initially taken up by the Crime and Economic Offences Cell of the Andaman and Nicobar Police before the Enforcement Directorate (ED) began a parallel money-laundering probe.
The ED subsequently arrested Murugan along with former Andaman and Nicobar Islands MP and former ANSCB chairman Kuldeep Rai Sharma and former loan officer K. Kalaivanan in connection with the case.
According to the ED, the alleged irregularities resulted in non-performing assets exceeding ₹500 crore. The agency alleged that loans were sanctioned to several entities without following prescribed banking procedures and that part of the funds was subsequently diverted.
The allegations remained subject to adjudication.
The Andaman and Nicobar Police CID filed a chargesheet in the case in September 2025 naming around 100 individuals and firms. The ED later filed a prosecution complaint under the Prevention of Money Laundering Act against 39 persons and entities.
Murugan’s health had deteriorated considerably while the proceedings were underway. During his bail proceedings, the High Court was informed that he had undergone removal of a kidney and had also undergone amputations and surgical treatment involving multiple fingers. His remaining kidney was also stated to have suffered damage.
The ED did not oppose his bail application on medical grounds, following which the High Court granted him bail in February.
The ANSCB case had drawn considerable attention in the islands because of the cooperative bank’s extensive presence and its role in providing banking and credit facilities to cooperative societies, farmers, businesses and residents across the Union Territory.
Murugan’s death comes while proceedings arising from the alleged ANSCB loan fraud remain underway.
Details regarding his last rites were awaited.
