The Directorate of Revenue Intelligence (DRI) has arrested a senior bank official and foreign exchange dealer for allegedly conniving with unscrupulous exporters who defrauded the government by claiming Rs 25 crore as duty drawback by showing fake export invoices. The official, from the Union Bank of India and the dealer, have been arrested and sent to judicial custody, DRI said in a statement. These exporters showed foreign currency received in cash against exports purportedly made them. Such foreign currency was shown to have been deposited in various banks using forged currency declaration forms.
Currency declaration form is a document that has to be filled by passengers arriving in India when they bring foreign exchange in the form of cash exceeding $5000. Such forms are countersigned by customs officers for authenticity. Once declared, this foreign currency can be deposited in a bank along with the CDF. Some of these exporters submitted fake currency declaration forms to banks based on which the foreign exchange was shown to have been remitted into their accounts. Based on this, they claimed duty drawbacks.
After investigations, DRI found that the foreign currency was not physically brought to the bank and deposited in the exporter’s account. In these cases, the exports contacted the forex dealer who used to send the documents for foreign currency deposit to the bank without the foreign currency. The dealer would send a currency purchase invoice (showing that he had purchased dollars) and the equivalent amount in Indian rupees to the bank, which would then credit the exporter’s account in Indian rupees after deducting its commission.
DRI’s investigations found that there was no foreign currency involved at all in the transactions in 75 per cent of the cases. The exporters simply used to give Indian rupees to the forex dealer. The dealer would then send the bogus purchase invoice and money received to the bank for onward transition. Moreover, the foreign exchange he was supposed to have received from the bank was shown to have been sold to regular international travellers by making fake cash memos.
DRI’s probe shows that the bank official misused his position as senior manager of the forex department of the bank and in connivance with the dealer, he helped in laundering over Rs 200 crore using fake/forged documents.