I-T detects irregularities in Maharashtra bank, freezes ₹53.72 crore

An Income Tax department’s release said that these deposits were structured to avoid mandatory PAN requirement for cash deposits of over ₹2 lakh

The Income Tax department has frozen ₹53.72 crore in various accounts of an urban co-operative bank in Maharashtra after unearthing glaring irregularities in opening of about 1,200 bank accounts, allegedly at the behest of one of the directors of the bank, officials said. The I-T department had on October 27, carried out searches at the bank and the residence of its chairman and a director.

More than 1200 new bank accounts were found to have been opened in the said branch without PAN (Permanent Account Number) and mandatory KYC. (Photo Couttesy-IT Department)

Analysis of data available on the Core Banking Solutions (CBS) system of the bank and the statements of key persons recorded during the search has revealed glaring irregularities in opening of several bank accounts, the department said in a release on Saturday.

More than 1200 new bank accounts were found to have been opened in the said branch without PAN (Permanent Account Number) and mandatory KYC (Know Your Customer) details, said the department.

It has, however, not revealed the name of the bank or its chairman or the director concerned.

“The investigations have revealed that these bank accounts were opened without following KYC norms and all account opening forms were filled in by the bank staff who also put their signatures or thumb impressions (on the account opening forms),” said the I-T release.

“In these accounts, multiple cash deposits, each of exact denomination of ₹1.9 lakh, were made totalling ₹53.72 crore. Out of these, more than 700 identified bank accounts were opened in a series, where cash deposits of more than ₹34.10 crore were made within seven days of opening of accounts, mainly between August 2020 and May 2021,” said the release.

“These deposits have been structured to avoid mandatory PAN requirement for cash deposits of over ₹2 lakh. The money was subsequently converted into fixed deposits in the same branch,” it added.

The tax department said it made enquiries in a few cases of such account holders and found that these persons were not aware of the cash deposits made in accounts opened in their names and categorically denied any knowledge about the accounts.

“The chairman, CMD and the manager of the bank could not explain the source of cash deposits and accepted that these were done at the behest of one of the directors of the bank, a prominent local businessman engaged in trading of grains. On the basis of the evidence gathered and statements recorded, the entire amount of ₹53.72 crore has been restrained,” stated Surabhi Ahluwalia, commissioner of I-T (media and technical policy) and official spokesperson, Central Board of Direct Taxation (CBDT).