Demonetisation blues: Cooperative banks fraud feared in note swap

Hyderabad: The Centre’s move to allow cooperative banks to deposit old currency notes will open the flood gates for exchange of black money, suspect agencies that will be monitoring it.

A source in the income-tax department said that cooperative banks and post offices were already under the scanner for routing black money fraudulently post-demonetisation.

The source said, “In states like Maharashtra cooperative banks are at the epicentre of converting old notes into new notes without proper accounting. In AP and TS, too, there were complaints about this modus operandi even if not at the level of Maharashtra.”

The CBI booked at least 10 cases of demonetisation fraud in post offices in TS and Rayalaseema. In all 10 cases, postal offices were found to be involved in illegally converting old notes into new.

The Central government recently allowed banks and post offices to exchange old notes with the RBI for those notes collected before December 30, 2016. Cooperative banks were also allowed to exchange old currency notes with RBI if they had collected them before November 14. An I-T official said that it is very difficult to monitor what’s happening in cooperative banks. “There is likelihood of fudging of records and pumping remaining old notes into the system.”

There are 32 state cooperative banks, 370 district central cooperative banks, and 93,042 primary agricultural credit societies. It is believed that in Maharashtra alone, Rs 2,770 crore worth of old notes have been stuck.