The Central Bureau of Investigation (CBI) has arrested an RBI official K Michael, senior special assistant, at the Issue Department, on Tuesday in Bengaluru for allegedly helping one of his friends convert demonetised high denomination notes to the tune of Rs 6 lakh into Rs 100 denominations at State Bank of Mysore, Kollegala branch without proper documentation.
According to sources Michael being from the Issue Department of RBI in Bengaluru had been to SBM, Kollegala(a town 100 kms away from Mysuru) to refill currency on November 8 and was at the branch when the demonetisation was announced.
“Taking advantage he helped one of his friends to exchange old notes for Rs 100 notes at the bank without any documentation in connivance with Prashivamurthy, who is now alleged to have laundered over Rs 1.51 crore more in similar ways” the source added.
The RBI has suspended him, ordered an inquiry into the incident and also clarified that the official arrested was a junior level functionary and not a senior officer .
The CBI had on December 6, registered a case against Parashivamurthy, senior cashier of SBM, Kollegala, for allegedly laundering Rs 1.51 crore of new currency in exchange for old demonetised notes without proper documentation for exchange, for alleged pecuniary benefits. Further probe into the case revealed the case involving Michael. The CBI officials said that SBM, Kollegala is a currency chest from where currency is issued to neighbouring SBM branches in the locality.
In another development the CBI arrested a JDs leader and casino owner KC Veerendra in connection with the seizure of Rs 5.7 crore in 2,000 denomination from his house.
On December 10, IT sleuths had raided 15 premises, including Veerendra’s house in Challakere in Karnataka and a casino owned by him in Goa. The officials seized Rs 5.7 crore in Rs 2,000 currency notes, besides Rs 90 lakh in Rs 100 and Rs 20 denominations in Hubballi district and in Challakere. CBI sources said Veerendra allegedly connived with some bankers and middlemen to exchange demonetised currency with Rs 2,000 notes.
According to sources his name had also figured in a cricket betting case. He was running a chit fund business and later forayed into casino and other ventures. Veerendra, is a former chairman of Primary land Development Bank.