Cobrapost Refutes The Wishy-Washy Manner In Which The RBI Deputy Governor Gives Clean Chit To Banking Majors In India
Cobrapost Found Clinching Evidence of Money Laundering Practices:
It will not be out of place to recall what Cobrapost had unearthed as a result of its undercover investigation, “Operation Red Spider.” A gist of what the various bankers had suggested to help the imagined politician make his money clean would suffice:
- Accept huge amounts of cash and invest it in insurance products and gold.
- Open an account to route the cash into various investment schemes of the bank.
- Do it even without the mandatory PAN card or adhering to the KYC norms laid down by RBI.
- Split the money into tranches to get it into the banking system without being detected.
- Use “benami” accounts to facilitate the conversion of black money.
- Use accounts of other customers to channelize the black money into the system for a fee.
- Get demand drafts made for the client either from their own banks or from other banks to facilitate investment without it showing up in the client’s account.
- Keep the identity of the investor/depositor secret.
- Open multiple accounts and close them at will to facilitate the investment of black money.
- Invest black money in multiple instruments in the names of different individuals, not necessarily drawn from among the family.
- Allot lockers for the safekeeping of the illegitimate cash, including special very large size lockers to accommodate crores of hard cash.
- Personally come to the residence of the client to take the black money deal forward and collect the cash, even bring along counting machine.
- Use provisions like Form 60 to deposit the illegitimate cash into the account to route it into investment.
- Help the client to transfer black money abroad through NRE (Non-Resident External)/NRO (Non-Resident Ordinary) account; transfer the money telegraphically or through means other than regular banking procedures.
What the Law of the Land has to Say on Money Laundering?
Although the Deputy Manager has chosen to overlook these findings under the pretext that “no transaction has taken place,” challenging thus the common wisdom, a cursory look at them makes apparent the gross violation of rules and regulations, framed under various laws of the land, namely, the Prevention of Money Laundering Act of 2000, the Income Tax Act and the Indian Penal Code, among others.
IF OFFENCE BE COMMITTED- IF OFFENCE BE NOT COMMITTED
Shall, if the offence be committed, be punished with imprisonment of the description provided for the offence, for a term which may extend to one- fourth, and, if the offence be not committed, to one- eight, of the longest term of such imprisonment, or with such fine as is provided for the offence, or with both.
2. To monitor transactions of a suspicious nature
Branches/offices should obtain all information necessary to establish the identity/legal existence of each new customer, based preferably on disclosures by customers themselves. Easy means of establishing identity would be documents such as passport, driving licence, etc. Where such documents are not available, verification by existing account holders or introduction by a person known to the bank may suffice.
Provided that where the principal officer of a banking company or financial institution or intermediary, as the case may be, has reason to believe that a single transaction or series of transactions integrally connected to each other have been valued below the prescribed value so as to defeat the provisions of this section, such officer shall furnish information in respect of such transactions to the Director within the prescribed time.
However, nowhere in the course of investigation, was the Cobrapost reporter turned away by the bankers when he declared his intent of fronting for a politician (imaginary) who wanted to launder his money.
- Customer who conducts transactions in a pattern consistent with criminal proceeds
- Unusual single or aggregate transfers
- Transaction is inconsistent with customer profile
- Routing of transfer through multiple locations or accounts or unexplained
- Transfers between accounts
- Structuring - transactions split to evade reporting
- Use of agents or associates to disguise the beneficial owner
- Transactions inconsistent with customer’s profile
- Maintaining multiple accounts without explanation
- Unexplained cash deposits in bank account
- Frequent cash transactions just under the reporting threshold
- Multiple cash transactions in multiple accounts
Non Financial Indicators
o Behavioural Indicators
o Customer is hurried, nervous or evasive
o Customer makes inquiries or tries to convince staff to avoid reporting
o Customer tries to convince staff not to complete the formalities
o Customer thoroughly aware of legal position on suspicious transaction reporting.
o Customer seems very conversant with money laundering or terrorist activity financing issues.
o Frequent cash transactions in large amounts which is not normally done by the customer.
o Small denominations frequently changed for large ones.
o Customer consistently makes cash transactions that are just under the reporting threshold amount in an apparent attempt to avoid the reporting threshold.
o Opening of several accounts simultaneously, some of which remain dormant for long periods.
o A third party appears to be using the account of customer.
All the bold highlighted indicators are violated or promised to be violated during our undercover investigation and thus are in sheer violation of the KYC norms.
BANKERS OWN CONFESSIONS TO THE COBRAPOST REPORTER ABOUT THEIR PAST CRIMINALITY NEEDS TO BE INVESTIGATED. BELOW ARE A FEW EXCERPTS OF THEIR CONFESSIONS:
There are many officials of these banks, caught on camera, who confessed to being old hands in slipping in cash money into the banking system and making it clean. Here are some excerpts:
A.Mishra, Deputy Manager, Axis Bank, East Delhi
S. Srivastava, Deputy Manager (Operations); S. Kaur, Branch Head, Noida, Uttar Pradesh
“Safe hai hundred per cent hai … two hundred per cent hai … maine cases niptaye hue hain yahan pe
“Wo main karwa doongi … maine karwaye huye hain sir… don’t worry (regarding conversion of rupees 5 to 7 crore into white using the account of some company or some other accounts)
N. Gupta, Assistant Manager, Axis Bank, Panchkula, Haryana
“Ek pichli baar Sir pachis lakh ka karaya tha…Sir ne karaya tha white money dikha kar ke aaram se nikaal diya… returns bahut hi ache mile the
S. Bhattacharya, Deputy Vice President/Branch Head; T. Anand, Deputy Manager, Axis Bank, South Delhi
P. Bhowmik, Personal Banker, HDFC Bank, South Delhi
A. Gupta, Sales Development Manager; M. Jain, Circle Manager, HDFC Standard Life Insurance, East Delhi
“Amount to aap 20 lakh kar lo 50 lakh kar lo aap ki marzi hai wo toh. Main bata to rahi hun 25, 30, 50 to aaram se uthta hai cash ka wohi bata rahi hun na. Sir adjust karna parega. Aisa hoga fir ek product mein 10 lakh chala jayega. Doosre product mein aapka 10 lakh chala jayega. Wo divide ho jayega yahan pe
K. Gerard, Branch Manager; M. Kumar, Financial Consultant, HDFC Bank, Venkateswaran K, Territory Manager, HDFC Standard Life Insurance, Chennai
“Bahut hai. Wohi main bol raha hun na 2005 mein main 50 lakh accept kara tha. Thoda din kam ho gaya because anti-money laundering jab se aaya, sabhi 20 lakh tak to hum log jaate hain. Isiliye 20 lakh ka humne baat hi nahin kiya. Hum aapse 10 lakh hi baat kar rahe hain taki. Aap bhi comfortable rahein hum bhi comfortable rahein. Kisi ko nahin maloom hoga
N. Mahajan, Senior Manager; Shabee, Sales Development Manager, HDFC Bank, South Delhi
“Kara hua hai na. Ek NRI tha. Usne 10 lakh rupaye ka investment kiya tha cash mein. Wo maine karwaya hua hai
S. Singh, Branch Head, HDFC Bank, Central Delhi
“Sir humnein toh, humnein jo hai Janakpuri, Rohini mein panch crore rupaye dalwaye hue hain
“Ye jo fund humara hai, ismein bhi hai, ispe humare Sir 498 crore rupaye dale hue hain, ye November tak ki hai
N. Singh, Backup Branch Manager (Branch Banking), HDFC Bank, Faridabad, Haryana
“Haan, haan, roz ka kaam hai humara. Humara roz ka kaam hai. Pehla case nahin hai ye
N. Gupta, Portfolio Relationship Manager/Deputy Manager; K. Jain, Personal Banker, HDFC Bank, Jaipur, Rajasthan
Wo to hota hi hai. Sir naam nahin batayenge. Johari Bazaar mein baithe hain to aap khud hi samajh sakte ho. HDFC Bank aur Johari Bazaar dono cheez aisi hain
A.G. Toppo, Senior Manager, HDFC, Kolkata, West Bengal
“Haan, haan… don’t worry… sub log aise hi karte hain Sir. In fact, saara jo kala paisa hota hai na sub insurance mein hi jaata hai
J. Bajaj, Branch Manager; N. Sharma, HDFC Bank, Faridabad, Haryana
“Kum hi hain. Ek–doh hain. Koi problem nahi ha
“Sir disclose nahin kar sakta, already daala hua hai. Safe hai
V. Srivastava, Privilege Banker, ICICI Bank, Central Delhi
R. Gupta, Branch Manager, ICICI Prudential, Agra
Gayathri, Branch Manager; C. Sridhar, Sr. Customer Service Associate (Operations), ICICI Bank, Bangalore, Karnataka
“Kiya hai … kiya hai
“You are not the first customer.”
“Wo sab daala hai… aap chahe toh… policy history dikha sakta hun ( Regarding any politician money)
“Humare Bangalore mein thoda kum ho gaya … Mumbai and all mein politician zyada hai … Bihar mein to politician hi daalta hai paisa insurance mein
N. Kumar, Business Manager; Aastha, Deputy Branch Manager, ICICI Bank, Noida, Uttar Pradesh
Deepanshu, Branch Manager; H. Maheshwari, Assitant Manager ICICI Bank, Aligarh, Uttar Pradesh
R. Sharma, Branch Manager, Faridabad, Haryana
“Saare logon ka funds jo hai ... property sell karte hain … aapko pata hi hai aaj kal sab black mein hi milta hai saara paisa, black mein milta hai, property sale proceeds karke letter le lete hain aur kar lete hain deposit kya hai…humein sirf ek letter chihiye hota hai …ki ye fund ...is … ka source of fund ye hai … as per the guidelines humare ko audit ke hisaab se ek letter rakhna hota hai
Cash mein humne kiya hua hai Sir aisa kuchh nahin hai… humne Sir account se hi debit karke diya hai … lekin account mein NRIs ke cash deposits hote hain because unhone property bechi, black mein paisa aaya, dus–dus lakh unhone deposit karaye hain humse… unhone investment kiya hai, usme koi issue nahin hai…Noida 18 mein main NRI Banking hi dekhti thi...usme property sale proceeds NRIs ki bahut aati thi ... paanch paanch crore ki property bikti thi, wo paisa kuch white mein aata tha kuch black mein aata tha. Toh black mein wo cash deposit karte hi the aur usise hum fir investment karte the us account se
R. Ranjan, Associate Key Relationship Manager; A. Kumar, Deputy Branch Manager, ICICIC Bank, South Delhi
A. Pathak, ICICI Lombard, Mumbai, Maharashtra
A. Dubey, Assistant Manager, ICICI Bank, West Delhi
S.Walia, Branch Manager, ICICI Bank, Chandigarh
“Paanch lakh ka humne cash kiya hua hai… koi issue nahi aata usmein
March 23, 2013