Demonetization did force the corrupt in the banking system as well as I-T department to tumble out of the closet
- In Politics
- 06:01 PM, Jan 18, 2017
- Nitten Gokhaley
Most of the experts from around the world appreciated Modi Government's demonetization move. Its impact on black money holders is a debatable subject until RBI releases final details about the amount that returned to the banks. However, even NDA Government's critics should agree that this move has shaken black money holders, corrupt bankers, as well as those who generate black money within the government machinery.
Corrupt bankers faced the heat after demonetization
Corruption in the banking system was always slightly visible until 2009. During the same year, public sector bank-Union Bank of India made it in the headlines when former Jharkhand chief minister Madhu Koda's front man deposited Rs 640 crore in cash at bank's Zaveri Bazaar (Mumbai) branch. Union Bank's staff processed the transaction without getting depositor's PAN, KYC details and violated RBI's norms by not informing the RBI's financial intelligence unit about the deposit.
Perhaps, 2010 was the year when banking sector's corruption came in front of the public. In December 2010, the Supreme Court ordered CBI to investigate how SBI and other public sector banks had sanctioned loans worth Rs.10, 000 crores to 2G scam accused companies without following proper procedure. In September 2011, CBI gave a clean chit to all the banks involved. Anyway, CBI was often sarcastically referred as clean-chit bureau during the congress regime.
Banking sector's can of worms remained closed until Mallya decided to escape to London. When bankers thought the storm has passed, they were forced to face the tornado in the form of demonetization. Some bankers really worked hard and served the public by extending their working hours. But, there were others who encashed this opportunity by converting black money to white in exchange for 30 to 50 percent commission.
Several branch managers, as well as other bank employees, from private and nationalized banks, were arrested for money laundering by I-T and CBI in various operations. Surprisingly, even officials from RBI were arrested for their involvement in money laundering.
It's clear, bankers helped black money holders to convert their black money to white on a large scale. Perhaps, very few of them were arrested due to I-T, CBI investigations, and sting operations done by TV channels. Many of them are probably still within the system.
I-T officials arrested with new notes
Believe it or not, even Income Tax Officers were arrested with new notes by CBI in various cities.
According to Times of India's report, Income Tax Officer-Vinay Kumar Manglain-was arrested with rupees one lakh (all new notes of Rs. 2000) in Rajasthan's Jhalawar by CBI officials on December 30, 2016. When CBI raided this income tax officer's house, they found Rs. 24 lakh in the new currency.
On the same day, another Income Tax Officer-Rajendra Dhond-was arrested by CBI in Pune. Officials found new currency notes worth four lakh fifty thousand along with other cash and 350 grams of gold biscuits at his residence.
Another ITO was arrested by the CBI on December 28 last year while accepting bribe and Rs. 2.03 lakh were recovered in cash from his residence in Visakhapatnam. However, CBI's press release did not mention if notes recovered were new or old ones.
These incidents show that integrity of bankers, as well as I-T officials themselves, is under the scanner.
Thinking about postal employees? No worries. CBI has also arrested postal employees for illegally exchanging currency in various cities.
Need to stop the generation of black money
The procedure of scrutinizing bank accounts for large and unusual deposits may continue for several months. There are crores of accounts and very small machinery to scrutinize the same.
Doctors, lawyers, traders, election candidates, and petty as well as high-ranking government officials will get back to accumulating black money soon, unless the government takes other steps. Now, the government should seriously consider working towards stopping the generation of black money by curbing corruption in its own system.
Slowly turning the economy into a cashless one can reduce corruption up to certain extent.
Following activist Anil Bokil's suggestion about abolishing income tax can prove to be a good start. Even former NDA minister Arun Shourie's suggestions about checking corruption in nationalized banks need to be taken seriously.
Today, almost every senior government official believes that he is above the law. Recent changes in the anti-graft law have given them a shield.
Modi Government should consider improving its anti-corruption mechanism by increasing the manpower in various units. There are multiple investigative agencies to check corruption, but most of them function just on paper.
Special fast-track courts should be set up to deal with cases involving bureaucrats. This is going to be tough, very tough, and risky because PM Modi's fight is against people who are part of the administration.
Reference links
http://indiatoday.intoday.in/story/Koda+aide+put+Rs+640+cr+in+Mumbai+bank/1/70512.html
http://www.financialexpress.com/archive/2g-scam-sc-asks-cbi-to-probe-bank-loans/722214/
Comments