ED to probe ICB forex dealings

Banking sources say that though the figures are small, this could be the tip of the iceberg. ICB could well be a front for a hawala operation. ED will be investigating the individuals who had opened forex account with ICB to ascertain whether they are genuine or not.

Official sources say that the crime branch of Delhi Police and even the CBI may be involved in the investigation. Since ICB did not have a RBI registration, RBIdoes not technically have the jurisdiction to investigate it. “This is a case of fraud and cheating. Only the investigative agencies can do the actual probe. RBI can help but cannot directly undertake the probe,” say sources.

Interestingly there is no mechanism within the banking system to detect cases of fraud banks. Bank officers accept that many fake banks like ICB could be operating in different parts of the country. While it is easy for such banks to operate in villages and distant towns, banking circles are surprised that such a bank could operate in New Delhi, right under the nose of Finance Ministry.

“The responsibility of checking such frauds lies more with the commercial banks than with RBI,” say sources. When a fake bank opens its account in another bank, it should check the documents furnished with the account opening form. Sources say that often the banks don’t confirm the facts with the RBI and the fraud goes undetected.