The Axis Bank Currency Conversion Case
Officials Axis Bank in Kashmiri Gate, Delhi, converted scraped notes worth Rs 30 crore for a hawala operator. On Friday, the Income Tax (I-T) department searched the bank premises and the residences of two senior bank officials who exchanged new Rs 500 and Rs 2,000 notes for old notes worth Rs 30 crore. The bank officials took 30% commission in gold bars from the hawala operator. Delhi Police had alerted the I-T officials after the arrest of a person with Rs 3.5 crore on November 21. According to Axis Bank, the customer who deposited the amount has been operating a current account for four years and deposits were made in his accounts. According to I-T officials, red flags were raised since a Gujarat bank official was caught receiving bribe of Rs 4 lakh in new Rs 2,000 notes on November 18. This is the first case of direct evidence of bank officials’ involvement in illegal conversion of banned notes and their collusion with hawala operators.
Four Employees of Bank of Maharashtra Suspended
Udgir is a small town in Latur district of Maharashtra. Four employees of the Bank of Maharashtra branch in Udgir exchanged invalid currency notes worth Rs 15 to 20 lakh fraudulently. They were caught and suspended. These bankers simply made unauthorized entries in the accounts of several customers. They too charged a commission of 30% from a local trader – seems to be the standard rate. Another employee of the bank promptly alerted the customer whose account was manipulated. The victim customer got frightened, rushed to the bank and made a hue and cry thereby alerting the manager and other staff. Inspector Balaji Sontakke of the crime branch of Latur said that their teams reached the bank where an audit was going on. He said depending on the outcome of the audit, a case would be registered.
The Noida Banker Helping a Friend Caught
Manoj Sharma, the branch manager of Oriental Bank of Commerce, Noida Phase 2, Uttar Pradesh, was caught by police while to helping a ‘friend’ change his black money. Sharma was caught while handing over Rs 1 lakh to the friend who had come with 25 ID proofs to cheat RBI rules on exchanging scrapped notes. The manager closed the bank on the pretext of running out of cash. Alert and aggrieved customers informed the District Magistrate N P Singh that ‘a few people were being entertained inside the branch’. Immediately Singh asked police to raid the branch. Police nabbed Sharma red-handed, while a long queue was waiting outside. Singh said that the police had shot a video of the incident as evidence and that a report had been sent to the bank’s Chairman and the finance ministry. According to the local people, black money hoarders do not have to stand in queues because they have their ‘friends’ in the bank, who help them by accepting several IDs provided either by the bank staff, or obtained from mobile phone shops. Another bank manager from Meerut reported that some persons approached him for IDs in bulk to exchange Rs 5 lakh worth of old notes, but he refused the offer.
Bank Accounts for Hire
Financial Intelligence agencies have dug up over 1,650 bank accounts which are on hire. Some people have been letting out their scarcely operated accounts for monthly rents from Rs 10,000 to Rs 15,000 to black money hoarders. One person had hired as many as 115 accounts. Agencies, which are scanning deposits made since November 8, issued show cause notices to such account holders. Agencies are trying to find out whether it is an organised racket, or run with connivance of bank staff. They are also looking into the role of bank staff in letting out accounts to convert black money. Reportedly, some bank officials were demanding 20% to 25% commission for depositing black money. On Thursday, agencies analyzed Suspicious Transaction Reports (STRs) from various states. They found 462 accounts from Bihar, 308 from West Bengal and 98 from Punjab had sudden surge of operations since Prime Minister Narendra Modi announced the demonetisation drive.
Jan Dhan Account Holders Caught Unawares
Jan Dhan account holders in Ludhiana alleged that they are refused withdrawals from their bank accounts. Bank officials said the trouble is only for accounts showing ‘dubious transactions’ and they had frozen such accounts. They said they have noticed that “gullible people are depositing hoarded cash into their Jan Dhan accounts”. The officials also said the frozen accounts are of people who have not fulfilled the Know Your Customer (KYC) norms and deposited cash after November 9.
Are Bank Officials Trading Your KYC Documents?
Several customers are stumped as bank officials tell them that they have already exchanged old notes, though it may be their first visit to the bank after demonetisation was announced. They allege that bank officials may be misusing their KYC documents. Some customers suspect that some bank officials may be misusing photocopies of KYC documents submitted with their banks. A Reserve Bank of India (RBI) official said that customers are not required to submit photocopies of any such documents but they can just show bank officials any of their identification proofs. If banks have customer’s KYC details, there is no need to provide additional proof. The official advised if there is any instance of manipulation, customers can approach the banking ombudsman.