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Deposit rupees, but no money-laundering: Bank of England

Responding to appeals by the Indian community to deposit demonetised rupees in Indian banks based in the UK, the Bank of England said it had no objection but expected banks to prevent money-laundering.

world Updated: Dec 16, 2016 22:14 IST
Prasun Sonwalkar
File photo of Rs 500 and Rs 1000 notes that were recently demonetised by the Indian government.
File photo of Rs 500 and Rs 1000 notes that were recently demonetised by the Indian government. (HT Photo)

Responding to appeals by the Indian community to make it possible to deposit demonetised rupees in Indian banks based in the United Kingdom, the Bank of England said it had no objection but expected banks to prevent money-laundering.

The large Indian community in Britain wants to deposit the old Rs 500 and Rs 1000 notes in Indian banks based here instead of travelling to India to deposit them. Several representations have been made to the Indian high commission and the Reserve Bank of India.

Mark Carney, governor of the Bank of England, said in a letter to senior Labour MP Keith Vaz that the Prudential Regulatory Authority (PRA) and the Financial Conduct Authority (FCA) had no objection to UK-based Indian banks accepting the Indian currencies.

“Whether it will be possible to deposit or exchange high-value Indian rupee banknotes at Indian banks in the UK is a matter for the Indian government…Of course, the FCA would expect that these banks apply robust anti-money laundering controls, to ensure that they are not used to facilitate financial crime,” Carney wrote.

The FCA said it had no objection to the Indian banks accepting rupees “providing they have the necessary prior consent from the relevant Indian authorities”. The PRA too confirmed there were no regulatory obstacles to the banks dealing with the demonetised currencies.

Most of the Indian currencies with the community are amounts retained during visits to India.

Vaz said: “Mark Carney has gone the extra mile to ensure members of the Indian diaspora in the United Kingdom may be able to exchange their Indian currency in the UK, following the bold decision to demonetise certain rupee denominations. 

“The Indian government is now free to enable currency to be exchanged in the UK, and avoid the deep concern currently being faced by many members of the British Indian community, who may not be able to travel to India by the deadline,” he added. 

Senior Labour MP Virendra Sharma, whose constituency of Ealing Southall has a large population of Indian origin, told Hindustan Times: “The demonetisation has caused significant inconvenience and hardship for many thousands of Indian citizens and NRIs not based in India. The Indian government has not put in place enough safeguards to ensure that people with legitimate savings they have worked hard for are not left worse off.”

Some Indian banks with branches in the UK are State of Bank of India, Punjab National Bank, Bank of Baroda, Syndicate Bank and the Union Bank of India.