2,400 public sector bank branches saw shady transactions after recall of notes

As many as 2,400 public sector bank branches have reported suspicious high-value transactions after the government announced demonetisation of 500- and 1,000-rupee bills, officials have said.

These transactions were carried out between November 8, when the government made the demonetisation announcement, and December 30, the last day of exchanging the withdrawn banknotes.

Officials said most of the banks which have reported the suspicious transactions are in Uttar Pradesh, Madhya Pradesh, Rajasthan and West Bengal and there are allegations that a section of bank employees were involved in money laundering.

A transaction above ~2.5 lakh by an individual is considered “high-value” and the Income Tax department have already started sending out notices to individuals under the scanner.

Prime Minister Narendra Modi’s shock announcement had led to a rush in banks by people and business houses to exchange the old notes, besides sparking a crippling currency shortage.

Modi had described the exercise as a surgical strike on black money though opposition parties were highly critical of the government over the cash crisis.

A senior government official said that over 70% of the depositors at the branches under scanner carried out transactions of more the ₹2.5 lakh.

Details of all high-value transactions have been sought by the department of financial services and these will be scrutinised with a “fine toothcomb”, not only to identify the customers but also to examine if bank officials have had any role to play. The Central Vigilance Commission and the Reserve Bank of India are also looking into the functioning of some private sector banks.