3 banks under ED scanner for laundering

Source :NEW DELHI:PradeepThakur:TNN:Aug13,2011,06-58 am 




Government sleuths have zeroed in on massive cash deposits, running into around Rs 1,000 crore, in the Delhi branches of three large private banks - ICICI, HDFC and Axis Bank. 
The Enforcement Directorate is probing why the banks didn't alert authorities about huge cash deposits made by an accused who allegedly laundered more than Rs 1,000 crore to a third country in less than a year. 

Working on a specific tip about the suspect, Pankaj Kapoor, laundering huge cash on behalf of some politicians and industrialists, ED in the last week of June searched CP Vault Pvt Ltd, owned by Kapoor and seized Rs 10 crore in cash. His deposits of Rs 8 crore were frozen in bank accounts. 

Sources said Kapoor told ED officials he had deposited more than Rs 1,000 crore in the central Delhi branches of these three banks in the last nine months, with his average single transaction exceeding Rs 10 crore. 

Pankaj Kapoor, the suspect raided by Enforcement Directorate sleuths last month, has revealed his modus operandi for money laundering. Kapoor's CP Vault Pvt Ltd offers locker facility to industrialists in Delhi's Connaught Place area. His client list is virtually the who's who of industry. His alleged modus operandi was to collect cash, issue bogus diamonds trading bills, and remit the money to companies located in Dubai and from there to beneficiary accounts in a third country. 

An official spokesperson for the Axis Bank said: "CP Vaults doesn't maintain an account with Axis Bank. However, two related firms maintained accounts with us and on their behalf we have handled import remittances in the past. The prescribed procedures for receipt of cash and for imports have been adhered to by the Bank including regulatory reporting." 

An ICICI Bank spokesperson said, "The bank has adhered to all the norms laid down by RBI with regard to the transactions mentioned." While HDFC Bank spokesperson said: "We have stringent systems and processes in place that flag off any suspicious transactions. Needless to say these transactions get reported to appropriate authorities from time to time as prescribed under law." 

On his part, Kapoor maintained that he had been buying diamonds from Dubai and selling them to dealers in Surat and Mumbai in cash, an ED investigation revealed all the bills generated by him were bogus and he had actually not done any diamond trade. 

All the addresses and names of dealers provided by Kapoor in Surat and Mumbai were verified by ED officials and they, claim sources, turned out to be fake and in some cases dealers denied having ever done any trading with the accused.


 Sources said ED was likely to question the bankers about the deposits. As per the KYC (know your customer) guidelines issued by the RBI, it is mandatory for the banks to report all large cash transaction every month.