demonetisation modi banks fake fraud cyber crime theft axis bank state bank india corruption rs 2000 notes 500 notes fm arun jaitley bjp nda system banking officials executives
People queue outside a bank to withdraw cash and deposit their old high denomination banknotes in Kolkata, India November 30, 2016. Axis Bank is one of the banks where irregularities have been reported in the past few weeks since the demonetisation of high-value currencies on November 8, 2016.Reuters file

Cracking the whip on unscrupulous bankers who were allegedly found indulging in exploiting the chaos after demonetisation, the Modi government said it has initiated action against 27 public sector bank officials.

It's a classic case of fence eating the crop, as bankers play a vital role in preventing misuse of the currency crunch faced by people and on the other hand, elements who would be trying to convert their black money.

"Some cases have come to notice, however, of officials involved in carrying out transactions which were irregular and violative of RBI's instructions. Action has been taken in such cases and 27 officials of various public sector banks have been placed under suspension and 6 officials have been transferred to non-sensitive posts," the finance ministry said in a statement on Friday evening.

"While all efforts are being made to facilitate genuine transactions, illegalities will not be tolerated and appropriate action will be taken against individuals involved in irregular and unauthorised activities," the statement added.

The government's decision to ban Rs 500 and Rs 1,000 notes as part of its crackdown on black money has activated crooks to indulge in fraud, often in connivance with bank officials. Three instances of obvious collusion of bankers has come to light in the past 20 days.

Raid on Karnataka bureaucrats

Even as people were standing in queues outside ATMs to withdraw money in small amounts, an income tax raid on the houses of two state bureaucrats in Bengaluru on Thursday revealed they had Rs 2,000 currency notes worth Rs 4.7 crore.

S C Jayachandra was chief project officer of the State Highway Development Project and T N Chikkarayappa, managing director of Cauvery Neeravari Nigam Ltd.

"...from where Rs. 4.7 crore came (in cash in new currency). It must have come from the bank only. How did they get it ... from which bank," Home Minister G Parameshwara told the Karnataka Legislative Council on Friday, after which he announced the suspension of the two bureaucrats.

A PTI report said that the seizure was part of the nationwide raids that has resulted in Rs 2,000 currency notes worth Rs 5.7 crore being seized after the denomination was introduced into the system on November 10, 2016. The raids were conducted by income tax officials along with policemen in Bengaluru, Erode and Chennai.

The total cash seized in new currency was put at Rs 5.7 crore, besides confession of unaccounted income. "Total admission of unaccounted income by the group stands at Rs. 152 crore. Investigations are on," the agency quoted income tax officials as saying in New Delhi.

State Bank of Mysore, Axis Bank in the net in Chennai

In Chennai, officials of public sector lender State Bank of Mysore (SBM) and private sector lender Axis Bank were arrested by the police for trying to launder Rs 25 lakh. 

The SBM incident came to light when two officials of its Shastri Nagar branch — Lokeshwara Rao and J Elangovan — who were exchanging defunct Rs 500 and Rs 1,000 notes for new currencies after charging a commission, triggered suspicion among their higher-ups who asked the two officials to account for Rs 50 lakh in new currencies alloted to the branch. Fearing that their act would be exposed, the two officials went about arranging for old currency notes and that led to their ultimate arrest.

"For producing the currency in the bank, Elangovan got in touch with five mediators, who promised him help to exchange the old currencies for new notes. For this, the men introduced him to Mukesh and Manikandan from Axis Bank," the New Indian Express quoted an investigating officer as saying.

What followed later was a series of missteps. Elangovan was to give Rs 25 lakh in Rs 1,000 notes to Mukesh (Axis Bank Nanganallur branch assistant manager) and Manikandan (Axis Bank Velachery branch assistant manager), who would give him Rs 3 lakh less, in new currency, retaining their commission.

But Elangovan ran out of luck soon. When he went to a pre-agreed spot to do the "transaction" on Friday (November 18), they were waylaid by two motorbike-borne men who escaped with the cash. A petrified Elangovan told about the incident to his co-conspirator Logeshwara Rao after returning at midnight. The presence of the two officials inside the branch at midnight aroused the suspicion of policemen who were keeping a watch on the branch and finally resulted in the arrest of five persons, including the four bank officials.

Axis Bank, again

In Delhi, officials of the bank were searched after reports emerged that two persons were found to be in possession of new currency worth Rs 3.5 crore. 

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