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IT department seeks audit of all Union Bank branches for high-value transactions

IT department seeks audit of all Union Bank branches for high-value transactions
PTI
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First Published: Tue, Nov 17 2009. 07 40 PM IST
Updated: Tue, Nov 17 2009. 07 40 PM IST
New Delhi: The income tax (IT) department has asked state-run Union Bank of India to immediately carry out an audit of all of its branches to check for such large deposits that have gone unreported.
The IT department, during a probe into alleged money laundering by former Jharkhand chief minister Madhu Koda, had stumbled upon a bank account at Union Bank’s Zaveri Bazar branch in Mumbai where approximately Rs214 crore had been deposited in cash between 5 January and 30 March in 2007.
Under Reserve Bank of India (RBI) guidelines, all cash deposits of at least Rs50,000 must be checked by a branch manager, while the Prevention of Money Laundering Act mandates that banks must furnish to the finance ministry’s Financial Intelligence Unit a statement of all cash transactions of more than Rs1 million.
The IT department has said that the bank did not furnish details of cash transactions worth more than Rs1 million by Balaji Bullion Corporation and Balaji Bullion Bazar, two companies alleged to have helped Koda. The Zaveri Bazaar branch in Mumbai had cash transactions worth crores for both firms that were not reported to the FIU.
The bank’s chairman and managing director M.V. Nair was questioned on Monday by the IT department as part of the investigations into alleged corruption by Koda.
“Not taking cognizance of transactions of such serious nature by you and non reporting (of these) could have serious implications for the country. It is likely that your branches all over the country might be having many more such accounts with whopping cash deposits therein which have gone unreported,” a letter to Nair allegedly says.
“You are requested to kindly consider ordering a thorough audit of all accounts in your bank and furnish details of all those accounts which are having such cash deposits or which are of suspicious nature,” the letter says. Bank officials did not immediately comment on the letter.
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First Published: Tue, Nov 17 2009. 07 40 PM IST