Delhi co-op bank stashed 120 cr in 1,161 accounts to skirt note ban: report

31 Dec 2016


Income tax authorities have come across Rs120 crore of demonetised currency deposited in nearly 1,161 suspicious accounts in a Delhi-based cooperative bank, suggesting a racket to convert scrapped bank notes.

The Income Tax department carried out searches at the head office of Delhi-based Jain Cooperative Bank at Delhi's Daryaganj area and all its other branches at Karol Bagh, Shahdara, Gandhi Nagar and Laxmi Nagar over the last five days, reports quoting authorities said.

According to the Income Tax department, the plan was devised by the bank's board which met in the office the bank's chairman in Daryaganj on 12 November, three days after the government announced the demonetisation of the Rs500 and Rs1,000 notes in an effort to curb black money.

Besides chairman Rajesh Kumar Jain, the meeting was attended vice-chairman Pradeep Jain, two independent directors and nine other directors, reports quoting sources said.

It was alleged that in order to circumvent the Rs4,500 individual limit on deposits of old currency in bank accounts, the bank filled deposit forms using identity cards of people and daily quotas for exchange of demonetised cash were decided for everyone - from Rs50,000 for the chairman to Rs4,500 for the peon.

Besides, each person had to arrange fake identity proofs to get the amount of cash they were allowed to exchange.

According to the investigators, no formal records were drawn for this meeting and even the camera installed in the room of the chairman was switched off for that day.

The chairman allegedly directed an officer to manage the exchange of notes as planned and the cashier was asked to hand over new currency to him who in turn gave it to the officials concerned, taxmen said.

Despite the RBI's instructions issued on 15 November to not allow exchange of old notes at cooperative banks, this co-op bank continued this till 23 December and the bank has converted more than Rs3.5 crore, sources said.

Income Tax investigators say that more than 1,200 new accounts opened in the past one month and possibly several other accounts are 'benami' accounts.

Investigators also found that bank management deliberately destroyed CCTV footage to remove any evidence and many members of the staff have been shifted to different branches making it difficult to trace them.

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