Tuesday, January 18, 2022

The new cash seizure trail

The new note bundles are being found all jumbled up, breaking the sequence of serial numbers and leaving them with no markings or bands, which could have indicated which bank they had come from.

Written by Ritu Sarin | New Delhi |
December 14, 2016 2:31:56 am
demonetisation, demonetisation, new currency notes, black money, demonetisation-black money, RBI-demonetisation, India news, Indian Express New notes seized: Part of a Rs 1.33 crore haul on display in Thane Tuesday. (Express Photo by Deepak Joshi)

The now daily recovery of huge quantities of freshly minted currency notes has added another layer of complexity to the black money crackdown as agencies, especially income tax authorities, have to busy themselves in tracing the route the currency took from the chest of the Reserve Bank of India to the branch of the PSU/private bank and finally to the hiding place of the hawala operator or the suspected hoarder from whom it was confiscated. So worrisome has become the pattern of evident complicity of bank officials — the only repositories of all new currency — that income tax officials say scores of cases will have to eventually registered by agencies like the CBI.

There is hectic behind-the-scenes activity in income tax investigation wings these days with officials admitting that besides findings by their own intelligence wings, they are getting “leads” — of large volumes of cash being stashed from the Financial Intelligence Unit; the Intelligence Bureau; local police and even the Prime Minister’s Office.

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Said a key I-T official in Jhandewalan, where the investigation unit is located, “When we go in for a search or seizure, we have got everything worked out, maybe through our informers or even telephone interceptions. These days, everyone is giving us tip-offs, which we are duly acting upon but which may or may not yield a recovery. But the large volumes of new currency being discovered has taken officialdom by surprise.”

Other patterns have emerged. The new bundles are being found all jumbled up, breaking the sequence of serial numbers and leaving them with no markings or bands, which could have indicated which bank they had come from. Second, early investigations in a few cases have led to the discovery that while serial number records have been maintained by the RBI only till the point the new Rs 2,000 and Rs 500 currency is being distributed to the 4,400-odd currency chests, no records are being maintained for their onward journey into branches of banks.

That has led to the requirement of sustained interrogation of the suspects, several of whom have given out the names of bank officials, who are then being taken in for questioning. Some, like in an Axis Bank case, have even been arrested after the probe revealed a quid pro quo in terms of commissions being taken in gold. Officials told The Indian Express that others, for instance Delhi-based lawyer Rohit Tandon, are holding out from revealing the sources of the cash.

IT officials in other cities like Bengaluru said new currency seizures have now become a daily occurrence and they are already investigating about 25 cases where new currency worth more than Rs 10 lakh has been seized during searches. An official said, “The role of several officials in both PSU and private banks is under the scanner in our city and they evidently had no fear of being discovered. They thought their dealings in new currency with touts and hawala traders would never be discovered…”

I-T officials note that the largest volumes of new currency appears to have moved into the hands of traders and hawala operators in the first two weeks after the PM announced the demonetisation drive. A few cases under the scanner have revealed that officials in some large bank branches pushed out stocks of old currency in the branch itself and that commissions in the early days were as high as 30-35 per cent. Once the supply of old currency began to thin out, the commissions dropped to 5-10 per cent and bank officials began “layering” the transactions with the new currency changing hands of several money launderers before it was “safely” stashed away, I-T officials said.

Officials of the Central Board of Direct Taxes (CBDT) told The Indian Express they will gradually hand over to the CBI and the Enforcement Directorate the information they have collated after conducting searches and making recoveries. They said they have found that in most cases of recovery from rich businessmen and traders, the relationship between banker and client had been a old one. As an official put it, “The businessman may have been dealing with a bank manager for years and may look upon him almost as a business partner. In such a situation, the banker was expected to help in the hour or crisis. Only, this time, he did it for a commission.”

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