The Income Tax Department has uncovered serious manipulations in several cooperative banks, which were involved in laundering unaccounted cash at an unprecedented scale, post Prime Minister Narendra Modi's demonetisation decision.
"Accepting deposits in demonetised currency notes irregularly and exchanging them at a premium back dating of cash deposits to circumvent the November 8," sources said.
Notification structuring deposits in multiple accounts to escape reporting norms permitting use of un-allotted lockers by beneficiaries to park unaccounted cash bank management using the bank to launder personal unaccounted cash.
According to reports, a cooperative bank in Alwar was used to launder personal unaccounted cash of Rs. two crores by the management. The directors of the bank were also found to have cheated the bank of Rs. eight crores by fraudulently obtaining loans in the names of 90 persons of doubtful identities.
In case of a Cooperative Bank at Jaipur, unrecorded cash of one and a half crore was found secreted away in an almirah in the "Clearing House" room of the bank.
Analysis of the new currency notes found with the bank revealed that more than 2000 new currency notes of Rs. 2000 denomination were taken out of the bank illegally. Serious discrepancy was detected in the daily record of HDCNs maintained by the Bank and non-adherence to the KYC norms.
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Cash in un-allotted and benami lockers were seized from cooperative banks at multiple places, including Solapur, Pandharpur, Surat and Jaipur, sources added.
A cooperative bank at Pune and another at Bandra West, Mumbai reported receipts of HDCNs to the RBI far in excess to that found during stock taking in the banks. The excess reporting from just these two banks was more than 100 crores.
The impunity with which these entities operated post demonetisation became obvious from investigations in a cooperative bank at Darya Ganj, Delhi.
A total of more than Rs.120 crores was deposited in the Bank by December 26,2016, most of which were routed back to the beneficiaries. While investigations are progressing at fast pace, these findings suggest a general absence of requisite regulatory oversight over the cooperative banks across the country which needs urgent attention.