With reports coming in of several arrests due to money laundering and fraudulent currency exchange since November 8 when Prime Minister Narendra Modi’s demonetisation drive came into effect, the Reserve Bank of India (RBI) on Tuesday warned of stern action against wrongdoers, including banks.
The RBI has asked banks to preserve CCTV recordings of operations at bank branches and currency chests to help law enforcement agencies identify people engaged in hoarding of new notes post demonetisation.
The central bank also asked various banks to carry out a thorough central data checking while it suspended a junior functionary of the RBI who was arrested in its Bengaluru office earlier on Tuesday.
The harsh move comes at a time when the central bank realises that massive money laundering and unlawful currency exchanges are taking place in various parts of the country.
Meanwhile, as the demonetisation drive reached the 35th day on Tuesday, RBI Deputy Governor R Gandhi said that old currency notes of Rs 500 and Rs 1,000 denomination that were returned to the central bank and the currency chest, amounted to Rs 12.44
lakh crore.
“While, the money that various banks have issued through their counters and ATMs since November 10 and up to December 10 stood at Rs 4.61 lakh crore,” Gandhi added.
RBI Deputy Governor SS Mundra told a select group of reporters in Mumbai, “We have issued elaborate instructions to all banks to do central data checking. Wherever they find any inconsistency, it should be pursued further through their internal audit mechanism.”
“Banks have also been told to preserve CCTV recordings of operations at bank branches and currency chests for the period from November 8 to December 30, 2016, until further instructions, to facilitate coordinated and effective action by the enforcement agencies in dealing with matters relating to illegal accumulation of new currency notes,” the central bank said.
“Our supervisors are also carrying out similar exercise on various data points of banks and wherever any untoward kind of transactions or actions are noticed, due action would be pursued and due investigation would be carried out,” Mundra added.
When asked about money-laundering, Mundra added, “Banks have already taken action against staff involved in such cases.” Citing the example of the arrest of an RBI official in Bengaluru earlier on Tuesday, Mundra said, “let me clarify, it is a junior functionary of the RBI and it was reported by the investigating agency that he was recorded to be present in a bank branch where this kind of transaction was happening. We have suspended the employee and have instituted investigation and due action will be taken once the details are known.”
When asked about the cancellation of Axis Bank’s licence following massive malpractices, Mundra denied it. “As I mentioned, wherever any such actions are reported, enquiries are being made, but as of now no show-cause notice has been issued to Axis Bank,” he said.
The RBI and its team is also coordinating and collaborating with various investigating agencies, he added.
Meanwhile, long queues of customers were seen outside banks which on Tuesday opened after a three-day break. With most ATMs running dry in the metropolis, people thronged the banks since morning, some of them even standing in queue as early as 6 o’clock, to access their funds, over a month after the Centre’s demonetisation drive triggered a huge cash crisis.
“The entire system is continuously gearing up for supporting the circulation of notes in the hands of the public. Daily, we are issuing more and more notes, getting them printed and issuing them. This will be a continuous affair. The public are requested to freely use the notes that they have in their hands rather than hoard it,” RBI Deputy Governor R Gandhi said.