Co-Operative Banks Receive Laundering Alert From Rbi

The Reserve Bank of India (RBI) has asked primary (urban) co-operative banks to maintain strict vigil in opening and operation of deposit accounts so that they do not unwittingly become conduits for money laundering.

The co-operative banks have also been directed to take stringent action against all officials / employees, who violate the central bank's instructions pertaining to opening and operation of deposit accounts and / or facilitate suspicious transactions.

The RBI observed that despite its repeated instructions a few banks had facilitated transfer of large amounts of cash by opening deposit accounts. "The remittances received through telegraphic transfers were credited into newly opened accounts and withdrawn in cash on the same day."

 

The RBI, in a directive to the PCBs, said suspicious transactions should promptly be reported to the investigating agencies, such as enforcement directorate / income-tax department.

Cash deposits and withdrawals of Rs 5 lakh and above in deposit accounts and other accounts, such as, cash credits / overdrafts, etc, should be closely monitored and proper record of such transactions should be maintained.

The central bank said cash deposits or withdrawals of Rs 5 lakh and above should be reported by the branch manager to the head office on a fortnightly basis along with full particulars, such as the name of the account holder, account number, date of opening the account, etc.

"On receipt of such statements from branches, the head office should immediately scrutinise the details and have the transaction looked into by deputing officials, if the transactions, prima facie, appear to be suspicious," the central bank said.