The complaint was lodged against Khan and others by Commission Chairman Anwar Manippady before the Upalokayukta, S B Majage. The Lokayukta post is vacant in Karnataka.
It also named land developer Ziaulla Sharieff, Chairman of Al-Ameen Trust Mumtaz Ahmed Khan, besides some Directors and officers of the Bank, officials of Karnataka Cooperation Department and local officials of RBI.
According to Manippady, the Commission received a complaint on November six this year from S Ahmed Ibadullah, Advocate, SAI Associates, on the alleged misuse of funds amounting to Rs 300 crore by former Presidents of the bank here about ten years ago.
The Commission, he said, examined the issue and found that though the misappropriation of funds is clearly established, no action has been taken so far against the culprits by the Cooperation Department, police and RBI.
"As per the balance sheet of the bank (2008) more than Rs 3500 crore of misappropriation by benami sanctions/sanctions to firms owned by relatives of ex-Presidents and ex-Board of Directors/overdrafts allowed against norms/non-recovery of loans is prima facie proved", Manippady said.
"More than Rs 300 crore is reportedly misused by K Rahman Khan when he was holding the post of the President of Board of Directors," he alleged.
The Commission said erstwhile CEO of the bank Shahar Banu filed a police complaint on February nine this year against Khan, former Deputy Chairman of Rajya Sabha, and many ex-Board of Directors and beneficiaries.