How Demand Drafts Were Used To Turn Black Money Into White
BENGALURU:
In the government's ambitious move to wipe out black money, the notes ban is being followed by raids by the Income Tax Department, the Central Bureau of Investigation and the police across the country. The raids have indicated that new currency meant for the people is diverted to individuals through multiple illegal methods with the alleged involvement of banks. NDTV reports one such way in which cash was handed out to the owner of a private company through issuing, and later cancelling, demand drafts.
In Bengaluru, the Basavanagudi branch of the Central Bank of India came under the scanner of the CBI when S Gopal, director of Omkar Parimal Mandir, a company manufacturing incense sticks, along with his son Ashwin Sunku, working for the same company, ordered 149 demand drafts worth Rs. 70 lakh from the bank.
The demand drafts were issued in the name of MS Bajaj Finance Limited between November 15 and 18. The money for the demand drafts was paid in cash, all in old currency.
Within days, they cancelled the drafts and the bank reimbursed the entire sum to them in cash, all in new currency.
Bank association officials said this was against the RBI rules. Demand drafts cannot be issued against cash.
"The demand draft can only be issued by debiting a customer's account. It cannot be done across the counter. If a person is coming with cash on counter and asking for any demand issuance, the demand draft cannot be issued as per the latest guideline. It has to be issued from the customer accounts only," explained SS Shishodia, President, All India Bank Officers' Association.
The CBI arrested Gopal, Sunku and Lakshmi Narayan, senior manager of the bank. The CBI suspects that without Narayan's collusion, the transaction would not have been possible.
When NDTV approached the bank's branch, its manager refused to talk about the issue. The bank's regional head also refused to comment as the case is still under investigation.
In the government's ambitious move to wipe out black money, the notes ban is being followed by raids by the Income Tax Department, the Central Bureau of Investigation and the police across the country. The raids have indicated that new currency meant for the people is diverted to individuals through multiple illegal methods with the alleged involvement of banks. NDTV reports one such way in which cash was handed out to the owner of a private company through issuing, and later cancelling, demand drafts.
In Bengaluru, the Basavanagudi branch of the Central Bank of India came under the scanner of the CBI when S Gopal, director of Omkar Parimal Mandir, a company manufacturing incense sticks, along with his son Ashwin Sunku, working for the same company, ordered 149 demand drafts worth Rs. 70 lakh from the bank.
Within days, they cancelled the drafts and the bank reimbursed the entire sum to them in cash, all in new currency.
Bank association officials said this was against the RBI rules. Demand drafts cannot be issued against cash.
"The demand draft can only be issued by debiting a customer's account. It cannot be done across the counter. If a person is coming with cash on counter and asking for any demand issuance, the demand draft cannot be issued as per the latest guideline. It has to be issued from the customer accounts only," explained SS Shishodia, President, All India Bank Officers' Association.
The CBI arrested Gopal, Sunku and Lakshmi Narayan, senior manager of the bank. The CBI suspects that without Narayan's collusion, the transaction would not have been possible.
When NDTV approached the bank's branch, its manager refused to talk about the issue. The bank's regional head also refused to comment as the case is still under investigation.
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