There were allegations that Secretariat Cooperative Bank in Lucknow had granted a loan of Rs 2.10 lakh in violation of the banking guidelines.
The economic offence wing of the govt had sent a report on the irregular transaction to the confidential wing of the home dept. However, the report just gathered dust in the home dept and no action was taken.
According to sources, there are five govt servants involved in the fraud. They belong to the secretariat and the Lucknow Municipal Corporation.
The latest information is the tax dept of the cooperative bank has begun its own investigation as the govt authorities had chosen to sit tight and not take any action in the matter.