Taking a serious note of Union Bank of India (UBI) not reporting high-value transactions to it, the government has asked the state-owned bank to immediately carry out an audit of all its branches to check for such large deposits that have gone unreported.The Income Tax department, during a probe into alleged money laundering by former Jharkhand chief minister Madhu Koda, had stumbled on a bank account at one of UBI’s branches in Zaveri Bazar in Mumbai where approximately Rs214 crore had been deposited in cash between January five and March 30, 2007.

The bank, whose chairman has been summoned by the Income Tax department in the Koda probe, has now been asked for an audit of all accounts of Union Bank of India, suspecting that the bank’s branches throughout the country may not be following the norms.

“Not taking cognisance of transactions of such serious nature by you and non reporting (of these) could have serious implications for the country. It is likely that your branches all over the country might be having many more such accounts with whopping cash deposits therein which have gone unreported,” said a letter to Union Bank of India CMD MV Nair.

The Bank officials did not comment immediately.

Manoj Punamia, stakeholder in Balaji group, had earlier said that the company had no role to play in the Koda episode. However, there has been no word from the group after the Tax and ED authorities questioned him.

The IT department, which summoned Nair, has said that the bank did not furnish details of cash transactions worth more than Rs10 lakh by Balaji Bullion Corporation and Balaji Bullion Bazar, two companies alleged to have helped Koda.

Union Bank’s Zaveri Bazaar branch in Mumbai had accounts of Balaji Bullion Bazaar and Balaji Bullion Corporation where there were cash transactions worth crores and were not reported to the Financial Intelligence Unit.

While in one company there were cash transactions worth Rs214 crore between January and March 2007, in another company there were cash transactions worth Rs644 crore during 2006 and 2007.

The department, in the letter to Nair, has also said, “You are requested to kindly consider ordering a thorough audit of all accounts in your bank and furnish details of all those accounts which are having such cash deposits or which are of suspicious nature.”

Under the Prevention of Money Laundering Act, banks are required to furnish to the Financial Intelligence Unit — a statement of all cash transactions of more than Rs10 lakh.

The non-reporting of heavy transactions by a state-owned bank has raised several questions about the government’s policy on checking huge money flow and now officials in the finance ministry were discussing on plugging the loopholes to make the PMLA more stringent.

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September 2021