As You Stand In Queues, They Convert Dirty Cash. Here's How Some Banks Are Laundering Black Money After Demonetisation

While common men have to stand in queue often for hours to withdraw Rs 2,500, some bank officials are busy helping big fishes to convert their black money into white. The bank in question is Axis Bank. Around Rs 40 crore of cash in old denominations were converted from black to white in the Kashmiri Gate branch of the private sector bank in Delhi

AFP

An initial probe conducted by the Income Tax department has revealed that three shell companies were used to launder this money. Both the branch manager as well as the operations manager were allegedly involved in this big banking scam. They allegedly charged one percent of the total amount deposited as their commission.

AFP

Interestingly, all these deposits were made after 6.30 pm when all public banking works end. This confirms the suspicion that the bank managers would collaborate with hawala operators in converting the black money.

This is how the entire scam was carried out

A total sum of Rs 39.26 crore was deposited in the accounts of three different shell companies namely Sunrise Trading Company, Himalaya International and RD Traders. Once the money was deposited, it was sent to the real beneficiary through RTGS (Real-time Gross Settlement ¨C specialist funds transfer systems where the transfer of money or securities takes place from one bank to another on a real time and on a gross basis.

BCCL

If so much money is being deposited in various bank accounts and the beneficiary is one person, the bank has to raise a suspicious transaction report. Not only this, but the Know Your Customer (KYC) norms have to be followed and PAN number of the depositor has to be given before the submission of such a huge sum. But all these norms were allegedly flouted in this case.

Here the question that begs to be asked is how is it while the aam aadmi is waiting in long lines for hours at a stretch to get Rs 2500, how is it that these fat cats can get away converting black money into white through the official banking system?

¡®Transaction was done after adhering to KYC norms¡¯

The Axis Bank said in its defence that the transaction was done after adhering to the KYC norms and no rules were flouted.

AFP

¡°The deposits were made in the existing accounts of our customer at Delhi¡¯s Kashmere Gate branch. We are investigating the matter in detail and is fully cooperating with the agency on ground,¡± said the bank¡¯s official spokesperson.

The role of bank officials in hawala network was first exposed in the Bank of Baroda scam where Rs 6,000 crore was transferred to foreign bank accounts by shell companies.

The IT department on Friday carried out searches on the bank premises and residences of two senior bank officials who are accused. The tip-off came from the Delhi Police after they arrested a person with Rs 3.5 crore on November 21.

AFP

The Friday¡¯s raid in Delhi is the first instance of a direct evidence of bank officials¡¯ role in allegedly converting old currency into new through back-door channels.

Red-flags were raised when a Gujarat official was caught taking Rs 4 lakh bribe in new Rs 2,000 denominations on November 18.

I-T department had sensitised intelligence bureau and other agencies to monitor the role of banks in converting old currency to new.