Officials said the I-T department aimed to check suspected tax evasion by these banks, as well as the possible loss of revenue through alleged illegal acts by authorised individuals. As part of its tax evasion probe, the department has asked these banks to produce various documents for verification. The documents included books of account, deposit logs of more than 12 months and the reports of their respective internal inquiries conducted in the wake of the Cobrapost sting operation, officials said.They added the notices, issued under section 131 of the I-T Act, which dealt with the power regarding discovery and the production of evidence, followed two recent reports--one submitted by RBI to the department of financial services and the second by the financial intelligence unit to the department of revenue.
In its report on accusations against the three banks, RBI had said there were instances of splitting cash deposits below Rs 10 lakh to avoid reporting it as a cash transaction.It said the banks were found to be accepting cash of Rs 50,000 or more without a permanent account number (PAN).
Bank customers had been observed to be structuring cash deposits higher than Rs 50,000 into smaller denominations, to obviate the need for recording PAN details for income tax purposes, it had said.
In a report in March, Cobrapost had accused the three banks of money laundering. Earlier this month, it had accused another 23 public and private sector banks and insurance companies, including State Bank of India, Life Insurance Corporation of India, Punjab National Bank, YES Bank, Federal Bank, Reliance Life, Tata AIA and Birla Sunlife, of “running a nation-wide money laundering racket”.
While the central bank was preparing a report on the portal’s first exposé, Cobrapost released another set of instances of alleged money laundering, backed by videotaped evidence against 10 more banks — five each from the public and private sectors.