The Income Tax Department has started investigations into alleged irregularities at Urban Credit Cooperative Bank located in Maharashtra. The tax department said more than 1,200 new bank accounts were opened by the bank without the Permanent Account Number (PAN).
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 and they have put their signature/thumb impressions.
The tax department carried out search and seizure operations on October 27 at the headquarters and one of the branches of the bank. The residence of the Chairman and one of its directors were also covered.
The analysis of bank data on Core Banking Solutions (CBS) and the statements of key persons recorded during the search operation have revealed the glaring irregularities in opening the bank accounts.
In these accounts, multiple cash deposits each of exact denomination of ₹1.9 lakh, were made totalling to ₹53.72 crore. Out of these, more than 700 bank accounts have been identified which were opened in series, where cash deposits of more than ₹34.10 crore were made within 7 days of opening of bank accounts, mainly between August 2020 and May 2021.
These deposits have been structured to avoid mandatory PAN requirement for cash deposits over ₹2 lakh. The money was subsequently converted into fixed deposits in the same branch.
Local enquiries in few cases of such account holders, have demonstrated that these persons are not aware of cash deposits in the bank and categorically denied any knowledge of such bank accounts or even the fixed deposits.
“The Chairman, CMD and the manager of the branch, 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, who is a prominent local businessman engaged in trading of grains,” the Income Tax Department said in a statement.
On the basis of evidence gathered and statements recorded, the entire amount of ₹53.72 crore has been restrained.
Further investigations are in progress.