Acting against Reserve Bank of India’s (RBI) alert on sudden surge in deposits in co-operative banks, the Enforcement Directorate (ED) has started investigating around 300 district co-operative banks across India.
Out of all the targeted co-operative banks, Mumbai’s -Shamrao Vithal co-operative Bank has attracted higher scrutiny .This particular bank registered Rs 1,400 crore deposits post-demonetisation.
When ED began to scrutinise the bank’s accounts, it found out that it had actually received only Rs 900 crore in `deposits’. The remaining Rs 500 crore was merely an overstatement by the bank in its report to the Reserve Bank of India (RBI).
The RBI then referred the case to the ED for an investigation, along with other similar cases.
As per several media sources, ED officials suspect massive money laundering, and have asked the Mumbai bank to provide all transaction details for examination.
The ED has asked the 300 district co-operative banks to provide CDs containing details of all deposits and other transactions, particularly the deposits made since the demonetisation of Rs 500 and Rs 1,000 notes on November 8.
The agency will examine cash deposits, money transfers through RTGS (real time gross settlement), new accounts opened since demonetisation, and accounts these banks may have in other government and private commercial banks where they deposit their collections.
The government has also asked the income tax department and the CBI to join the probe against co-operative banks. The work has been divided among the three agencies to complete the task in a specific timeframe and prosecute those found involved in laundering black money .
The RBI had recently alerted the government on a sudden surge in deposits in district and urban co-operative banks that lack proper monitoring mechanisms. While the I-T department will investigate the transactions of all state co-operative banks, the CBI has been asked to probe urban co-operative banks, which are more in number. The ED will look into transactions of district co-operative banks, about 300 in all.
The agencies have also asked the co-operative banks to provide CCTV footage of their branches for a specified period, particularly after demonetisation kicked in.
A handful of big co-operative banks have reported deposits of more than Rs 10,000 crore since demonetisation, though the window of deposit was available to them only for a few days after November 8.