Cobrapost II live: Big public banks also named in money laundering

Discussion in 'Economy & Infrastructure' started by parijataka, May 6, 2013.

  1. parijataka

    parijataka Senior Member Senior Member

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    Earlier expose by Cobrapost had revealed how private banks such as HDFC, Axia and ICICI provided money laundering services. Now they reveal that public sector banks across the country, including SBI, Canara Bank,IDBI, Punjab National Bank, Oriental Bank of Commerce and Central Bank do the same too.

    Cobrapost II live: Big public banks also named in money laundering

    Cobrapost has named Andhra politician Sailijanath Saake in money laundering expose and also alleged that senior bank executives personally go to collect cash to help customers launder black money.

    “Bank officials holding the ranks of divisional managers, territory manager, assistant general manager and vice presidents say they are all party to such money laundering transaction, said Aniruddha Bahal. He has accused 23 private and public financial institutions of aiding money laundering. Life Insurance Corporation, State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, Indian Bank, IDBI Bank, Yes Bank, Federal Bank, Reliance Capital, Birla Sunlife are among the few that have been named.

    Aam Aadmi Party’s supremo Arvind Kejriwal said the expose revealed that the government of India is directly allowing and encouraging money laundering. He also raised doubt whether banks and insurance companies are laundering terror money.

    According to the expose, banks provide facilities to customers such as multiple lockers and machines to count money. For money laundering, banks enable creation of forged pan cards and multiple accounts, said Bahal, adding that they advise investors to maintain fictitious accounts for seven years saying that all details vanish after this period.


    However, immediately after the press conference began, banking stocks recovered from the morning’s losses. The bank Nifty is down just 0.8 percent.

    Bahal alleges money laundering by 23 fin institutions

    10am: In his second expose on irregularities in the Indian financial system, Aniruddha Bahal today accused 23 public and private financial institutions for facilitating money laundering. Cobrapost has named public banks including State Bank of India, Canara Bank IDBI, Punjab National Bank, Oriental Bank of Commerce and Central Bank.


    The Cobrapost investigations were conducted fore more than half a year in many states including Uttar Pradesh, Rajasthan, Delhi, Haryana, Andhra Pradesh & Karnataka

    The second round of secret videos have revealed violation of several provisions of the Income Tax Act, FEMA, RBI regulations, KYC norms, the Banking Act, said Bahal in a press conference today. “The revelations amounts to crystal clear offenses under IPC as well as the PMLA (Prevention of Money laundering Act).”

    “Money laundering services are being offered openly as a standard product across the board. Even a walk-in customer can avail of such services that help him launder all his unaccounted cash. Money laundering practices are part & parcel of banking & insurance business across the board,” added Bahal.


    Bahal promises another expose on money laundering by banks

    9:00 am Investigative journalist and editor of digital magazine Cobrapost, Aniruddha Bahal is all set to release a new set of secret recordings to expose irregularities in the Indian financial and banking system, which is likely to be 20 times bigger than the first expose and may name several big politicians too.

    On March 13, Bahal had aired several secret recordings showing that several bank employees were involved in structuring transactions to aid tax evasion and fraudulent transfer of funds. Codenamed ‘Operation Red Spider’, it exposed money laundering practices in HDFC Bank, ICICI bank and Axis Bank.

    Today’s expose will cover the who’s who of the Indian financial industry and claims to have more evidence of money laundering by leading banks. Bahal will address a press conference at 9:30 am through the screening of the investigative documentary.

    The previous videos showed staffers of these three leading Indian banks allegedly flouted norms related to know-your-customer (KYC) and help customers stash black money in lockers and abroad. The Cobrapost videos showed bankers asking for easily available KYC documents, and, in some cases, even advising customers not to submit a PAN card so they can stay off the tax radar.


    While all three banks have denied any wrong doing and publicly stated that all operations are ethical, the Reserve Bank of India on Friday said it has not given a clean chit to the three banks, which are accused of money laundering and flouting KYC norms, and stated the probe against the three banks is still on.

    “We have talked to those banks, called those CEOs for a meeting, told them about what the deficiencies are and they have gone back and implemented some of the systemic improvements,” Subbarao said, adding RBI officials have also spoken with forensic auditors appointed by these banks.

    Meanwhile, to ensure customer due diligence is adhered to, RBI has asked banks to extend KYC/AML/CFT norms to wherever third party products are sold as agents as a measure of abundant precaution. Banks would also have to maintain details of third party products sold and related records for a period and in the manner prescribed in the KYC/AML/CFT guidelines.
     
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  3. sob

    sob Moderator Moderator

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    RBI is going to insist on more stringent KYC norms and it is going to be a big headache for most of the people to adhere to them.

    But the real problem lies in the system, no matter how much stringent KYC norms become at the end of the day if giant loopholes exist in the system, then the system needs a revamp.

    RBI needs to stop being an ostrich and unleash their team of auditors to get at the bottom of this mess.
     
  4. pmaitra

    pmaitra Moderator Moderator

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    RBI is the biggest money launderer - the only institution in the country that is legally allowed to print counterfeit money. Corruption is India's national pastime.

    For that, and other reasons, nothing surprises me.
     
  5. Singh

    Singh Phat Cat Administrator

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    Why doesn't the Govt offer infra bonds for cash scheme. You put whatever black money you have into these bonds, no questions asked, after a few years, they'll turn into white, no interest will be paid obviously.

    In any case, why would anyone part black money in banks ? what's real estate for ?
     
  6. Singh

    Singh Phat Cat Administrator

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    Parliament Street, HDFC Bank Case 5


    Parliament Street, HDFC Bank, Case 5 R. Utreja, Back-Up Branch Manager, Parliament Street, New Delhi



    The woman banker turns out to be an ace, and knows all tricks of the trade. Split your money, she would say, or invest in one shot, and show all your unaccounted cash something as an earning from agriculture. Utreja claims to be an old hand in money laundering: “Abhi Sir humne aise ek aur bande ka bhi karwaya hai na … unka bhi tha pachaas lakh ka … unka bhi aise hi tha black to white kara tha unhone (Sir, only recently, we have done this for someone … it too was for Rs. 50 lakh … his case was the same [as yours] of converting black [money] to white).”



    Here, at this branch of HDFC Bank on Parliament Street, the Cobrapost journalist meets Back-Up Branch Manager R. Utreja. Pleasantries over, our reporter comes straight to talking business: A minister wants to invest Rs. 60 lakh in some long-term plan, with handsome returns but with no TDS, for we don’t want to show it in the books. More money, Rs. 5–6 crore, is expected in March. All the money is in cash and needs to be invested in three names, including the politician’s wife.



    Utreja tells us about HDFC Crest, a tax-saving plan with guaranteed returns. However, Utreja is one of the odd cases who ask us the source of the income: “Isko hum dalwa toh denge but humein kuch income proof to dena padega ki wo housewife ho ke itna paisa kahan se aaya (We can put the money in investment, but you will have to give us some income proof that being a housewife how did she get all that money).”



    However, money seems to be a bigger incentive for her.



    Utreja forgets about the source of income for a moment and starts explaining HDFC Crest. When our reporter asks her if the returns would be in white, she ends up assuring us: “Bilkul … poora white ho kar aayega (Absolutely, it will all come in white).”



    We remind her that the policies need to be done in three names. Here comes the question of showing the ITR again. Utreja asks our reporter if he can show he is working. We clearly explain her it’s the minister’s money and we don’t know where it has come from. So we need to hide it.



    Utreja seeks to meet the minister: “Aap meeting karwa sakte ho unse (Can you arrange a meeting with your minister).”



    You will definitely meet the minister, says our reporter. She says she would bring her branch manager to the meeting as swell.



    To take us into confidence, she opens up her card: “Abhi Sir humne aise ek aur bande ka bhi karwaya hai na …unka bhi tha pachaas lakh ka … unka bhi aise hi tha black to white kara tha unhone (Sir, only recently, we have done this for someone … it too was for Rs. 50 lakh … his case was the same [as yours] of converting black [money] to white).”



    The conversation has turned business-like now.



    Utreja starts disconnecting her official calls or doesn’t attend them. She listens intently to us with her hand on her forehead. We tell her that none of the information should be disclosed and the minister’s wife should not get a notice from the Income Tax office.



    She reassures: “Kuch nahin aayega Sir (Nothing [like a notice] will come Sir).”



    To avoid taxes Utreja advises us: “Main aapko Sir main ek advise karti hoon … jo aap keh rahe ho na pachaas hai total… toh isko har saal dus dus kar do na … poora white ho jaye …har saal dus dus kar lo na seedha … usmein koi dikkat aapko bhi nahi aayegi … aur tax-free hoga … na paisa katega aur section ke neeche rebate bhi milegi aapko (I would like to advise you … what you are saying … it’s Rs. 50 [lakh] … divide it into tranches of 10 lakh each … all of it will become white … every year invest Rs. 10 [lakh] straightaway … you will not face any problem … and it will be tax-free … money [tax] will not get deducted …. and under the section [80C] you will also get [tax] rebate).”

    We decide to create three policies in three names for which Utreja needs some documents like a PAN card. We don’t want to give her the PAN card for which she comes up with an alternative to provide a bank statement.



    But insisting on PAN card, she offers us a solution as well: “Nahin, nahin Sir kuch bhi nahin hoga Sir… abhi humne peeche dalwaya tha … unhone na agricultural land show kar diya tha (No, no Sir … nothing will happen … recently I got it [the cash] slipped in for someone … they had showed agricultural land).”



    We get the cue that we could show all our ill-gotten money as agriculture income and invest if without any fear of being questioned ever.



    She continues saying: “Abhi aap Sir sirf dus lakh daal rahe ho Sir … log toh pachees pachees tees tees lakh rupaye daal chuke hai ismein (Sir, you are putting in only 10 lakh … [many] others have put in Rs 25 lakh, Rs 35 lakh in this [plan]).”



    For routing the money, Utreja agrees to open three accounts in three different names. She suggests us to deposit the cash in smaller amounts in these accounts and the money would be routed to the investment plan from there on. She explains the entire procedure in detail.
    Satisfied on the investment part of the deal, our reporter comes to another important item on our wish-list. We are expecting Rs 5–7 crore in bills of 500 from a deal in Greater Noida in March. Could she provide us a locker big enough to park all our cash?



    Utreja would sure help us with two small ones instead: “Sir bade toh nahin … main aapko do chote dilwa doongi (Sir, we don’t have big one, but I can arrange two small [lockers] for you).”
    But won’t there be a problem to accommodate all the big cash in bills of 500?



    Utreja would convert the bills: “Sir main aapke hazaar waale change karwa doongi …kya dikkat hai (I will get all the cash changed into the bills of 1000 … what is the problem)?”



    After so long a discussion, Utreja finally comes around to suggest us a shorter way to invest all our unaccounted cash.



    She says: “Aap ek baat suno Sir … one time bhi daal sakte ho (Listen to me Sir … you can also put in one-time).” There are one-time investment plans available with her bank.



    How would the money be routed? We ask.



    Utreja has an ace up her sleeve: “Sir wo alag alag accounts mein dalwa ke … consolidate karwa ke … wo hum dekh lenge (Sir, we will get it slipped into different accounts … get it consolidated … I will take care of all that).”



    The suggestion is unmistakable in its creativity to circumvent the system.



    Do it only if you have done in the past, we say, don’t do take us as pigmies.



    Utreja is a seasoned professional to reassure us: “Aap toh Sir 10-10 lakh ka dalwa rahe ho … abhi humne NR customer ka 40-40 lakh dalwaya hai (You are putting in only Rs. 10 lakh … only recently, I got an NR customer to invest Rs. 40 lakh [apparently in cash]).”



    Satisfied that Utreja won’t take us for a ride, we now come to the last of our wish-list.



    The minister’s wife is a frequent traveller to England. Could you help transfer some of the crores to somebody there.



    Utreja can’t do much about as such transmissions are strictly monitored by RBI. She nonetheless recommends: “Haan toh wo aap kar sakte ho … chote chote amount bhejo … koi poochega nahin (Yes, you can do that … send small amounts … nobody will ask you).”



    The interview with Utreja draws to a close with a word to move forward in the presence of the minister. Utreja says she would bring along Branch Manager D. Sharma and an investment manager to the meeting.

    News Detail
     
  7. Singh

    Singh Phat Cat Administrator

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    Wow, Bank guys are scared now. They are being extra bureaucratic with any transactions now.
     
  8. Yusuf

    Yusuf GUARDIAN Administrator

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    My employee wanted to open an account. Bank refused to open as he didn't have PAN card. So I don't know what the guy means when he says even a walk in customer can get money laundering services.
     
  9. Singh

    Singh Phat Cat Administrator

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    :facepalm: Seriously there is a difference between a customer bringing in crores vs a customer bringing in thousands.
     
  10. Yusuf

    Yusuf GUARDIAN Administrator

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    No matter what is done, black money will not go away. Actually if the report is true, govt should be happy that black money was channeled into white system adding to the liquidity
     
  11. Yusuf

    Yusuf GUARDIAN Administrator

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    When the guy says a walk in customer, seriously do you expect a person come in with suitcase full of notes?
     
  12. Singh

    Singh Phat Cat Administrator

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    If I am going to be banking crores, I expect to be treated differently. Your logic just doesn't fly.
     
  13. sob

    sob Moderator Moderator

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    scores of Indian Laws are being broken besides the evasion of the Tax. This evasion of the tax is what hits the Government hardest as their income reduces.
     
  14. Yusuf

    Yusuf GUARDIAN Administrator

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    Failed policies and siphoning off lots of money hurts the hardest. Govt better utilize better what it already has
     
  15. Yusuf

    Yusuf GUARDIAN Administrator

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    Agree. What I am saying is that every walk in can get hawala facilities and I am disputing that
     

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