Bandhan Bank MD & CEO Chandra Shekhar Ghosh said banks do not have the capacity to detect whether unaccounted money of the rich has been deposited into the accounts of poor. Ghosh said it is not possible for banks to differentiate whether deposits are out of black money or white money of the account holder. He said banks can supply the information to the government agencies for their investigation.
Do you have Jan-Dhan accounts in your bank?
Historically we are a microfinance institution. So all our customers are that level (Jan -Dhan) of customers, that kind of customers.
Did you observe any sharp surge into deposits in such accounts post demonetisation?
We have restrictions on deposits in the ground level. Not more than Rs 5,000 they can deposit in Jan-Dhan account (at once), because we are collecting the deposit and installment from the field, so we have the restriction on that. They cannot deposit any amount in their account on the field. It can be a maximum Rs 5,000. If you have more amount, you can come to the bank branch, you give the full KYC (to deposit higher amount).
Prime Minister Narendra Modi on Saturday said he is working on a formula on how to send the corrupt to jail who deposited their money in Jan-Dhan accounts of poor. Do banks have the wherewithal to detect this?
No, banks cannot detect that. In this moment, what we can do is that we can supply the data as per the needs of government, and they can be assessed on that. The bank, whatever at our level, if we feel that these people’s income is not that much, we can stop, so how we can stop? If he says that I am paying tax, then I cannot stop (him from depositing). That is one side. The good thing is that the government is asking for information from time to time, it is also before (that they have asked for information), not only today. Before demonetisation also the banks have been giving data as per the requirement when the government asked for it, so they are tracking on that.
Is there any recent demand from the RBI or the finance ministry for monitoring Jan-Dhan accounts for tax violations?
Not like that (exactly), but yes some education has been given to the banking industry, that banks can look on that (Jan-Dhan accounts) and give some data.
Does our banking system have the capacity to differentiate between black money and white money being deposited in the bank accounts?
I cannot differentiate on that as a banker. I can only find out on that when I fill up the KYC of the customer, what is the source of that customer’s income. If the bank feels that at the time of filling the KYC form, if the income and cash deposits since opening the account is not that much, we are not interested in scrutinising that account. But if someone fulfills KYC, and after that goes to another branch and deposits money there, I cannot track that.
How much of the deposits do you expect to stay back in the system?
Whatever deposits have come to the banks, it is not that overnight you can withdraw. People will now go for online, electronic transactions This means the deposits will remain within the system. Now what is happening is that previously I withdrew money as cash to make payments. But I transact not with the money, I transact from my account to your account. So that way, cash utilisation will come down, because those who are using big cash they are well aware about the internet, mobile banking. Now, in this position they have already started that, how they can be used.
Have you seen any pressure in asset quality due to demonetisation?
Till now our NPA (non-performing assets) is 0.16 per cent. Very few cases of default, one or two have come, because we are a bank and we do not have any problem in receiving old notes of Rs 500 and Rs 1,000 up to December 30. So my customers are not facing any problems.