This refers to ‘Union Bank faces probe in Koda case’, November 14. According to the news item, Madhu Koda’s men deposited Rs 640 crore in cash in a PSU bank and therefore violated the norms and guidelines set out by RBI with respect to acceptance of deposits in cash and opening of new accounts known as KYC or Know Your Customer.
As per the Anti Money Laundering Act, every branch of a bank has to report to RBI on transactions that exceed Rs 10 lakh on a day. This means the deposits would have been brought to the attention of not just the branch manager but also to that of the CMD of the bank — it is also possible officials of the RBI and the finance ministry were informed about this. It speaks volumes that no one in the system thought it fit to flag these transactions.
It is this sort of behaviour that allows corrupt politicians, mafia lords and terrorists to get away with their crimes. The hundreds of crore that are required in such operations, throughout the year, are not transferred around the country in jute bags, the money is remitted through the banking system.
The reason why bank managers choose to keep quiet may have something to do with the fact that bank managers who get large deposits get promoted.
But what bank chiefs have to recognise is the damage that such instances do to the bank’s image. One CMD spoilt Indian Bank’s image in the eighties and it took ten years for the bank to restore its image.
Danendra Jain, Agartala