India, May 25 -- Established in 2006 to provide smooth banking services to Maharashtra's Marathwada region, the Dnyanradha Multistate Cooperative Credit Society Ltd (DMCSL) prided itself on being the "first multi-state" credit society in the region. By early 2024, its slew of lucrative savings and loan schemes had lured a pool of around 600,000 investors and depositors, deposits worth Rs.2,947 crore, and 51 branches across Maharashtra and the rest of the country.

Despite this seemingly impressive profile, the bubble soon burst. From May to July 2024, multiple DMCSL depositors, mostly small-time investors and farmers, approached the police in Beed, Jalna, Aurangabad and other districts with complaints of being defrauded. Amid allegations ...