An audit of the books of a Mumbai-based cooperative bank has found alleged misreporting of currency notes withdrawn to the tune of Rs 500 crore since demonetisation on November 8, said official sources.
The audit conducted by the Enforcement Directorate (ED) is a part of the agency’s ongoing probe of records of at least 50 bank branches across the country to detect hawala dealings and money laundering instances through these channels after the scrapping of high value notes of Rs 500 and Rs 1,000.
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In case of the cooperative bank, while the bank in its books has shown it has received Rs 1,400 crore in demonetised notes since November 8, the ED audit has found old notes worth only Rs 900 crore with the bank, said officials familiar with the development.
“While the bank says there is genuine entry mistake, we have referred the case to the Reserve Bank of India (RBI) for detailed investigation. It is a case of misreporting. We don’t know the reason behind this. Only RBI can take action against the bank for this,” said a source.
Email and phone calls to the official spokesperson of the RBI did not elicit any response.
Among other things, the ED along with banking auditors are scrutinising account statements of the bank branches, their CCTV footage and the daily RTGS transactions records. The audits are being conducted in bank’s branches in major cities such as Delhi, Mumbai, Bengaluru, Hyderabad, Kolkata, Chennai and others based on records of transaction of these branches where the maximum amount of old notes have been deposited or huge cash has been deposited in bank accounts in one go or in a staggered fashion giving rise to suspicion of suspect deposits.
In Mumbai, the agency has audited at least 10 bank branches.
On December 16, the ED searched four bullion traders and found Rs 69 crore in cash deposits using shell companies. In connection with the case, the agency froze two bank accounts allegedly “controlled” by a hawala operator accused in the multi-crore money laundering case involving former Jharkhand Chief Minister, Madhu Koda.
The ED also registered a case against fake account holders in the Noida branch of Axis Bank under the Prevention of Money Laundering Act on December 17. “We have temporarily suspended transactions in few current accounts as a part of a larger, enhanced diligence exercise,” said an Axis Bank spokesperson.