EC allows SBI to take currency vans holding Rs 570 crore back to Coimbatore

State Bank of India was transferring the money from Coimbatore to Vishakhapatnam to tide over a cash shortage in Andhra Pradesh when the vans were seized by the Election Commission

The Election Commission (EC) has allowed State Bank of India to take possession of three vans carrying about Rs 570 crore from its Coimbatore branch to the Vishakhapatnam main branch. However, the vans will return to Coimbatore now, as per the EC’s order.

Senior SBI offical said bank executives have held discussions at EC head quarters in Delhi as well as in Tamil Nadu.
Suspecting the cash was going to be used to influence voters in the Assembly Elections concluded on Monday, EC offcials had confiscated the vans last week.

In a statement, the bank had said it had produced documents showing authorised transfer of cash to Andhra Pradesh in police protection. This cash was to be used to address a temporary cash shortage in that state (AP).

Reserve Bank of India had authorised transfer of Rs 570 crores from currency chest at SBI Coimbatore Main branch to SBI Special Currency Administration Branch Visakhapatnam, SBI said. This movement of currency is duly authorised by Reserve Bank of India and had all necessary approvals, it added.

However, questions related to the seizure are yet to be answered, a banking expert said. 

"There are various things which need to be answered in the particular case. Why such a large amount has been transported to such a distance, while there are other currency chests closer to Vishakhapatnam? We are not sure whether no other chest closer had sufficient money or not," said C H Venkatachalam, general secretary, All India Bank Employees Association.

A static surveillance team of ECI has intercepted three Innova cars and three containers with money at Chengapalli, in Uthukuli Taluk, in Tirupur district upon suspecion that the money could be transported to distribute to voters for favourable votes. However, SBI said the money belonged to the bank and had been in transit from SBI Coimbatore’s main branch to SBI Special Currency Administration Branch in Visakhapatnam in order to address a temporary cash shortage in the state of Andhra Pradesh.

Commenting on this, SBI said, "As there is a temporary cash shortage in the currency chests across AP, to meet the needs of the public, a specific remittance was authorised by RBI (both at Hyderabad and Chennai in accordance with their Cash Management Policy)."

The currency chest, which carries cash to be distributed to the Banks whenever it is needed, was earlier managed by the Reserve Bank of India (RBI) but was subsequently handed over to different commercial banks. The banks, upon approval from the RBI, can withdraw the money from one chest and transport it to another location depending on need. According to the RBI website, there are around 275 currency chests in Tamil Nadu, 226 in Andhra Pradesh and 155 in Telangana.

Experts have also raised doubts on the lack of uniformed security officials, if what the Election Commission is right. The Election Commission, in its release on May 13, said, "The security officers accompanying the vehicles who belonged to Andhra Pradesh were not in uniform, the documents submitted did not have the vehicle numbers of the container lorry and the date mentioned in the invoice also did not match. State Bank of India, Coimbatore has informed the authorities that the money is their property and the same was being transferred from Coimbatore to Vishakhapatnam. However, since the vehicles contain large amount of cash with unsatisfactory documentation, the same were brought to safe custody for further investigation".

In response to the doubt, SBI today informed Business Standard that all three vans had the requisite number of security personnel and they were armed in accordance with the law for such activities. The cash has been secured in high grade container trucks secured with multiple high lever locks. 

Commenting on why the Bank did not inform the ECI officials regarding the movement considering that the authority has been cracking down every currency movement to curtail cash distribution for votes with the Legislative Assembly election, the Bank officials said that the movement of large sums of money is a regular activity between treasure chests of a bank when one treasure chest runs short of cash. 

"Every time such movements happen, appropriate documents are secured. Like always, this time too, all necessary documents were in place. Given that it is a regular currency chest to another currency chest cash transfer activity within the bank, in accordance with RBI directives and as there are no transactions with the public involved, they were not informed about it," added the Bank.

All concerned authorities ie. Income Tax, Police and the EC have been given all necessary documents. SBI would not be able to comment on the process being followed by the authorities. Senior RBI and SBI officials based in Tamil Nadu have been cooperating completely with them for earliest release of the trucks, said SBI. 

Meanwhile, the containers are being taken back to Coimbatore to execute search warrants under Section 132 of IT Act, according to the ECI officials.