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Home / News / India News / IT unearths laundering role of co-operative banks
  • India

    IT unearths laundering role of co-operative banks

    Written by
    Ramya Patelkhana
    Edited by
    Mansi Motwani
    Last updated on Jan 10, 2017, 05:45 pm
    IT unearths laundering role of co-operative banks
    Credits:
  • Income tax department officials have found several co-operative banks manipulating and laundering unaccounted money post-demonetization.

    Discoveries of the department suggest a regulatory oversight over co-operative banks across the country.

    Senior officials and directors of a cooperative bank in Daryaganj, Delhi allegedly assisted the opening of 1,200 accounts in which Rs.120 crore unaccounted cash was deposited and Rs.3.2 crore worth old notes were exchanged.

  • In this article
    Demonetization and the banking sector Cooperative banks face severe liquidity crisis Cash deposits in 285 DCBs surge sixfold post-demonetization 97% of recalled high-currency notes returned to banks The highest cash deposit made by Amreli DCB Gujarat Agriculture Minister and AJMSBL Chairman Dileepbhai Sanghani's statement Rs.12,000cr worth cash deposits in Urban Cooperative Banks Cooperative banks under the ED scanner Sanghani, also President of National Federation of State Cooperative Banks IT unearths laundering role of co-operative banks
  • Information

    Demonetization and the banking sector

  • On 8 Nov'16, Prime Minister Narendra Modi demonetized Rs.500 and Rs.1000 banknotes to drain illegal money from the economy, declaring a 50-day window to exchange/deposit the banned notes. Cash crunch soon followed, requiring banks to play a crucial role in maintaining the economic balance.

  • Cooperative Banks

    Cooperative banks face severe liquidity crisis

    Cooperative banks face severe liquidity crisis
    Credits:
  • Ironically, the immediate casualty to the demonetization was the cooperative banking sector, which faced severe liquidity crisis as the RBI banned them from accepting old notes within a week after demonetization.

    These banks are critical for rural India.

    All cooperative banks at the state, urban and district levels must have a current account with a Public Sector Bank where they hold cash deposits.

  • 07 Jan 2017

    Cash deposits in 285 DCBs surge sixfold post-demonetization

    Cash deposits in 285 DCBs surge sixfold post-demonetization
  • During the first four days after the demonetization on 8 Nov'16, cash deposits in 285 District Cooperative Banks (DCBs) rose sixfold compared to their reserves of Rs.496.88cr on 7 Nov.

    DCBs deposited a whopping Rs.3,051.2cr with Public Sector Banks between 8-14 Nov, after which the RBI banned DCBs from accepting cash.

    The Enforcement Directorate (ED) is now investigating 300 cooperative banks in rural areas.

  • Information

    97% of recalled high-currency notes returned to banks

  • Experts fear that most of the "black money" has returned to the banks only because of corrupt bankers, lax oversight, and fake deposits or accounts. 97% of the recalled Rs.15.4 lakh crore has returned to banks.

  • Deposits

    The highest cash deposit made by Amreli DCB

    The highest cash deposit made by Amreli DCB
  • About 100 Urban Cooperative Banks are also being investigated by the ED.

    Post-demonetization, Amreli Jilla Madhyastha Sahakari Bank Ltd. (AJMSBL) in Gujarat's Saurashtra made the highest cash deposit.

    The bank had Rs.1.3cr cash deposits in SBI's Kovaya Branch on 7 Nov, but over the next four working days, the deposits rose to Rs.209.15cr.

    Cash deposits at Sindhudurg DCB also jumped to Rs.78.3cr from Rs.2.22cr.

  • Quote

    Gujarat Agriculture Minister and AJMSBL Chairman Dileepbhai Sanghani's statement

  • "There was no specific ban on district cooperative banks accepting deposits until Nov 14. So the said Rs.209 crore is the deposit in those four days. RBI asked us to give details of KYC of depositors and we have given all of it."

  • UCBs

    Rs.12,000cr worth cash deposits in Urban Cooperative Banks

    Rs.12,000cr worth cash deposits in Urban Cooperative Banks
    Credits:
  • During the first three weeks after demonetization, nearly Rs.12,000cr worth cash deposits in banned currency were made by 325 UCBs.

    Each deposit made by the urban cooperative banks from remote districts was worth Rs.80 lakh.

    This was a 25-fold increase in cash reserves of these UCBs compared to their balance on 7 November.

    1,12,465 individuals/business entities made over Rs.1cr cash deposits till 30 Nov.

  • ED

    Cooperative banks under the ED scanner

    Cooperative banks under the ED scanner
  • Cooperative banks came under the scanner after Maharashtra-based SVC Cooperative Bank told the RBI it received Rs.1450 crore in old notes while ED found only Rs.946cr in its chest.

    SVC later admitted an "error" of Rs.504cr in reporting.

    The ED said one bank account showed a Rs.1.45cr fixed deposit during 9-30 Nov; there was no balance in the account from 1Oct-8 Nov.

  • Quote

    Sanghani, also President of National Federation of State Cooperative Banks

  • Dileepbhai Sanghani said no DCB official has been caught for fraud. He added: "The RBI and private banks are responsible for spreading defamatory rumors against us. RBI is responsible for the bad situation in rural agrarian economy by not releasing cash to district cooperative banks."

  • 10 Jan 2017

    IT unearths laundering role of co-operative banks

    IT unearths laundering role of co-operative banks
    Credits:
  • Income tax department officials have found several co-operative banks manipulating and laundering unaccounted money post-demonetization.

    Discoveries of the department suggest a regulatory oversight over co-operative banks across the country.

    Senior officials and directors of a cooperative bank in Daryaganj, Delhi allegedly assisted the opening of 1,200 accounts in which Rs.120 crore unaccounted cash was deposited and Rs.3.2 crore worth old notes were exchanged.

  • India
  • Narendra Modi
  • Enforcement Directorate
  • SBI
  • RBI
  •  
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