ED Probe Uncovers Pandemic-Era KYC Loopholes Behind Ashok Kharat's Alleged Benami Bank Network

Mumbai, August 4, 2026: The Enforcement Directorate (ED), in its prosecution complaint (PC), has alleged that self-styled godman Ashok Kharat exploited procedural relaxations and operational gaps in the Know Your Customer (KYC) process during the COVID-19 pandemic to build a network of bogus and benami bank accounts used to route financial transactions without the knowledge of the account holders.

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According to the agency, Kharat's alleged modus operandi involved exploiting temporary disruptions in the KYC process to facilitate the opening of 60 bank accounts without mandatory physical verification of customers. The ED claimed that these accounts formed part of a larger network of more than 100 bogus and benami accounts allegedly controlled by Kharat, through which funds exceeding Rs 4.12 crore were allegedly routed.

Alleged KYC Violations

The findings are based on statements recorded from bank officials during the money laundering probe. The ED said Milind Dadasaheb Bankar, Branch Manager of Samatha Nagari Sahakari Patsanstha (SNSP), Rahata, admitted that the prescribed KYC protocols were completely sidelined while opening 60 accounts directly linked to Kharat.

According to Bankar's statement, around 43 of these accounts were generated in a single day on May 25, 2021, when the cooperative society's Aadhaar-based authentication software was unavailable because of operational constraints during the COVID-19 pandemic. While physical Aadhaar verification was not possible, Kharat allegedly exploited the situation to get the accounts opened through alternate verification methods.

Instead of mandatory in-person verification, the identities of customers were allegedly confirmed through WhatsApp video calls, regular video calls and telephonic confirmations arranged by Kharat and his associate, Arvind Bawake, using their own mobile numbers.

The ED alleged that, in most cases, account opening forms had already been filled in before being submitted, while the actual account holders neither visited the branch nor interacted directly with bank officials.

The Branch Manager further stated that no approval had been obtained from the chairman or any higher authority to relax KYC compliance or Aadhaar-based verification during the pandemic. Despite the absence of such authorisation, the accounts were opened in line with what he described as the cooperative society's prevailing operational practices at the time, the ED alleged.

Network Expanded

The agency alleged that Kharat subsequently expanded this alleged network by facilitating the creation of 12 additional bank accounts in October 2024, while simultaneously utilising five pre-existing accounts belonging to his associate Arvind Bawake and Bawake's family members to channel funds.

According to the ED, Bankar admitted that Kharat deposited large amounts of cash into all 60 accounts.

As part of its enforcement action, the ED has frozen active balances totalling Rs 94.27 lakh across these specific accounts.

Further Irregularities Alleged

The probe also uncovered similar alleged irregularities at Jagdamba Mata Gramin Bigar Sheti Sahakari Patsanstha Maryadit in Sinnar. The society's Chairman, Namkran Yashwant Aware, who has been named as Accused No. 3 in the ED's prosecution complaint, admitted in his recorded statement that 34 fixed deposit and current accounts were opened between 2014 and 2024 on Kharat's instructions without mandatory KYC documentation or duly completed account opening forms.

Aware confirmed that 32 of these 34 accounts were opened under benami (proxy) names provided directly by Kharat. According to the ED, these 32 proxy accounts received cash deposits of Rs 1.86 crore in 2016, which subsequently matured into Rs 3.18 crore in 2024. The maturity proceeds were allegedly withdrawn by Avinash Waman Kandekar, the Branch Manager, and handed over to Kharat during his visits to the cooperative society's head office on the instructions of Chairman Aware, the ED claimed.

The ED further alleged that Aware admitted the names of the account holders were provided by Kharat and that the accounts were opened solely on his insistence, with assurances that KYC documents would be submitted later. However, the documents were never furnished and the prescribed banking norms were knowingly bypassed.

Aware also allegedly admitted that, despite being Chairman, he failed to ensure compliance with KYC and anti-money laundering norms because he was Kharat's devotee and could not question his spiritual leader.

According to the ED, Aware also admitted that although he regularly attended Board meetings, the issue of the irregular accounts was never placed before the Board of Directors. The agency said Aware confirmed that Kharat held key positions in the cooperative society, serving as vice-chairman from 2014 to 2020 and later as chairman from August 3, 2022, to September 3, 2024, and was aware of the transactions carried out during his tenure.

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Shadow Banking Allegation

The ED has alleged that Kharat's position within the patsanstha enabled him to exercise significant influence over its functioning, allowing the irregular accounts to remain outside the scrutiny of the Board and operate completely outside internal audit mechanisms, creating a shadow banking pipeline designed to integrate extortion proceeds into the formal financial framework.

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