Port Blair, Oct. 26: The Enforcement Directorate (ED) has arrested Port Blair-based hotelier Sanjay Lal in connection with the ₹ 500-crore Andaman & Nicobar State Cooperative Bank (ANSCBL) scam, deepening the probe into one of the most shocking financial scandals to rock the island territory. Lal, accused of availing large loans through fraudulent means, has been sent to judicial custody, officials confirmed.
A web of irregularities: The scam came to light after the Crime & Economic Offences Cell lodged an FIR in May 2025, naming former MP Kuldeep Rai Sharma, who had earlier served as the bank’s Vice-Chairman. Investigations revealed that hundreds of crores in loans were disbursed to shell companies linked to Sharma and others, bypassing standard procedures and relying on inflated property valuations. Last month, the ED arrested Sharma, along with K. Murugan, the bank’s Managing Director, and K. Kalaivanan, Loan Officer, under the Prevention of Money Laundering Act (PMLA). The trio were accused of sanctioning loans against properties held under power of attorney, despite a 2020 ban on such practices.
The latest arrest: With Lal’s arrest, investigators are now tracing the money trail involving fake firms and benami accounts. ED officers from Kolkata have been stationed in Port Blair, and searches have been conducted across nine locations in Port Blair and two in Kolkata to unearth the full extent of the alleged fraud.
Fallout and public concern: The scandal has rattled the cooperative banking sector in the islands, where ANSCBL plays a crucial role for small traders, farmers, and depositors. Reports of withdrawal anxiety surfaced earlier this year, prompting tighter monitoring and calls for a CBI inquiry into the case. Officials said the ED is now examining financial transactions across multiple banks to map fund diversions and identify end-beneficiaries.
The Larger Picture: The ₹ 500-crore scam has exposed deep governance lapses in the island’s cooperative sector and marks the first-ever major money-laundering probe by a central agency in the Union Territory. For a community built on cooperative trust, the scandal has left both financial and emotional scars that may take long to heal.
