The Income Tax department has raised serious concerns over the working of a number of cooperative banks across the country claiming they used the “opportunity” of demonetisation to make a quick buck and indulge in money laundering worth several crores.
An analysis report prepared by the department that has been accessed by news agencies, said tax sleuths found these banks have been involved in generating and routing of black money at an “unprecedented” scale post November 8 when the currency scrap was announced by Prime Minister Narendra Modi.
The report claims that “collusion in such illegal activities took several forms” as it goes on to chronicle the alleged clever and illegal modus operandi adopted by these banks to launder huge monies and criminally indulge in transaction of black money.
The I-T probe found that in the case of such a bank based in the small town of Alwar in Rajasthan, the directors of the bank cheated it of Rs 8 crore “by fraudulently obtaining loans in the names of 90 persons of doubtful identities” even as it was used to launder personal “unaccounted cash” of Rs 2 crore by the management.
“In a case of a co-operative bank at Jaipur, unrecorded cash of Rs 1.5 crore was found secreted in an almirah in the ‘clearing house’ room of the bank,” the analysis report said, adding it was also found by an I-T team that made a surprise visit to the bank that over 2000 new notes of Rs 2,000 were “taken out of the bank illegally”.
In a majority of these cases involving cooperative banks, the I-T department said it was found, that the banks used weak KYC documents and the transaction records were recorded, giving a hoot to banking rules and laws as framed by the RBI.
A huge amount of cash was seized by the department from un-allotted and benami lockers in multiple cities, prominently from small cities like Solapur, Pandharpur (in Maharashtra), Surat (Gujarat) and Jaipur in Rajasthan, it said.
In a case which the I-T sleuths said shocked them was when they went for a survey operation at such a bank in Pune and another in Mumbai, only to find that the “excess cash” was more than Rs 100 crore as what was reported by them on paper to the RBI.
A similar case of such a bank in national capital’s Daryaganj is being touted as one of the biggest disclosures of black money generation through cooperative banks post demonetisation.
“Demonetisation was used as an opportunity by this bank to make a quick buck through offer of money laundering services,” the report said, adding the Chairman and his aides “opened benami and fraudulent accounts to launder cash for beneficiaries”.
“More than 1,200 new accounts were opened post demonetisation in the name of third persons or name lenders on the basis of fake IDs and or weak KYC documents. A total of more than Rs 120 crore was deposited in the bank by December 26, most of which were routed to the beneficiaries,” it said.
Official sources said while the department has flagged these issues to authorities concerned, it is also speeding up its investigations under I-T laws and to check tax evasion.
“These findings on the modus operandi deployed by these banks to illegally benefit from demonetisation underlines the absence of necessary regulatory framework and this needs to be corrected immediately. A similar modus operandi was found in more or less each case.
“The I-T department has done the needful by informing the agencies concerned and the government,” a source said.