Kerala cooperative banks under I-T watch for deposits in old notes

Sources in the income tax department said several cooperative banks have taken in huge deposits in scrapped notes.

Written by Shaju Philip | Thiruvananthapuram | Updated: November 24, 2016 4:57 am

Kerala’s income tax department is probing suspected illegal operations in cooperative banks and societies aimed at salvaging unaccounted money after demonetisation came into effect on November 8.

Sources in the income tax department said several cooperative banks have taken in huge deposits in scrapped notes. Cooperative banks are not allowed to accept such currency but I-T sources said they have been accepting these and showing them as deposits made before November 8.

Although political parties in Kerala, except BJP, are lobbying with the Centre to keep the cooperatives sector tax-free, the I-T sources said they plan to expose the huge deposits in these banks and societies, most of which are controlled by politicians.

Cooperatives Minister A C Moitheen said the sector does not handle black money. The allegation has been raised to destroy cooperative banks in Kerala, he told The Indian Express. He said it was unfortunate that the RBI has kept cooperative banks out of transactions in old currency. “We will move the Supreme Court seeking a remedy he present crisis stemming out of the RBI directive that cooperative banks should not deal in scrapped notes,” he said.

According to I-T sources, some cooperative have used their staff to open accounts in nationalised banks to divert a chunk of black money from the banks and societies. In other instances, banks have allowed opening of fresh accounts to dump scrapped notes.

Around Rs 2,000 crore in deposits had reached the cooperatives sector after the RBI allowed it to collect scrapped notes, a decision cancelled days after demonetisation. Had the RBI allowed them to continue, I-T officials said, it would have ended up in laundering of black money in Kerala.

The I-T department, has sought details of deposits above Rs 25 lakh from cooperative banks, said this has been misunderstood by banks in Kerala. “We have decided to collect details of deposits above Rs 25 lakh initially, and of smaller deposits later. Now, these cooperative banks are trying to split these into chunks below Rs 25 lakh into many accounts to escape IT scrutiny,” an official said.

As per section 80-P of the Income Tax Act, cooperative banks and societies are eligible for income-tax relief provided they are giving agriculture loans. “But in Kerala, these banks and societies are giving gold loans under the guise of farm loans,” an official said.

The I-T department in Kerala brought the cooperatives sector under its radar a decade back. But it has not been able to go ahead with legal measures to tax these deposits, allegedly due to political influence.

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First Published on: November 24, 2016 2:08 am
  1. M
    Nov 24, 2016 at 12:43 am
    Freeze them for at least 5 years and watch out who starts coming crying!
    1. S
      Sivakumar Narayana
      Nov 24, 2016 at 6:07 am
      At this moment of time things are moving fast.I congratulate the finance ministry and the income tax dept to tighten their grip so young generation of India will enjoy the fruits of this excellent decision. It is also important Kerala state cop society should not reappear as old wine in new bottle under some other Kissan friendly;br/gt;lt;br/gt;Sivakumar kurup
      1. A
        ashok s
        Nov 24, 2016 at 12:54 am
        Same thing prevails in Gujarat, mp , Rajasthan why RBI and I.t dept not checking their. Only targeting Bengal, Kerala and opposition rule state is or clearly showcases the in efficiency and misuse of power by govt
        1. D
          Nov 24, 2016 at 3:41 am
          All opposition ruled states are having serious issues..
          1. G
            Nov 24, 2016 at 3:16 am
            Kerala's cooperatives banks are a den for mischief . Most of them these banks run huge losses as these are managed party affiliates and not professionals. Time IT dept take stringent action against these banks.
            1. S
              Nov 24, 2016 at 2:47 am
              in uttarakhand too same thing happening.. few days back a minister in state government tried to make his 50 crore rupees white... it department plz investigate
              1. M
                Mahender Goriganti
                Nov 24, 2016 at 1:22 am
                Audit all those banks and accounts, take action. they are all big fish and potential terror net works too.
                1. R
                  Nov 24, 2016 at 3:49 pm
                  I T should check BJP party's MP's and MLA's Account . it is a fact that BJP spent a lot of black money in last elections. Will have to do investigation in such money. Also RSS Shaks are said to be hiding huge amount of black money , Govt should investigate them too.
                  1. R
                    Rajiv G Manakkatt
                    Nov 25, 2016 at 5:31 am
                    Tata sons trust revenue 100 bil. dollar( rs. 7 lakh crore), (not including tea estates etc.). Total currency notes value in in india is 14 lakh crore. The move to curb black money by demonetization is appreciable but made common man's life miserable(I am supporting the move even then). Modi ji can get larger amount for india's well being by Levying high tax on few huge corporates( reliance, tata, birla etc..) than from income tax from w currency notes in the country. He should dare to do that too.. For the sake of poor and homeless, for sick and the unemplo, for petty merchants and small house holds. Jai hind.
                    1. S
                      Nov 24, 2016 at 5:59 am
                      IT should arrest few politicians with 100 crore and above daily basis. That should hit the news. So people of india enjoy time in talking. PEOPLE will be happy to hear that news .
                      1. A
                        Nov 24, 2016 at 4:51 am
                        Co operatives soceities and banks in kerala are the last resorts of all scoundrels who park their unacccounted money. Since most of these banks are governed by political parties mainly Muslim league and CPM,these self styled banks collect huge amount from black money holders like businessmen, doctors and public sector officials and split it into small acounts and deposit in benami names.Besides they are functioning as glorified gold loan financiers to small scale farmers .All most all the news paper advt for gold loan deposits and recoveries are by these co op banks.On 8th evening all these rogue banks opened for their high net worth customers to bring in huge amount of black money.IT should immediately radi these banks and find out the source of last minute depositors
                        1. V
                          Nov 24, 2016 at 3:08 am
                          Majority of cooperatives are conduit for black money and they are the one who dupe farmers of their hard earned money and make these banks bankrupt by looting the money.What is surprising is so far no politician has been killed or attempted suicide so imagine the amount of black money which they still hold .lt;br/gt;lt;br/gt;Mulayam was a Milk vendor and now he is a multi billionaire ,every one knows about Sharad and Mamta who have stashed the funds outside India.
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