Bank Remitttance Scam Rs.15000

Rs 15,000 crore remittance scam hits six banks-DNA-08.01.2015

The Enforcement Directorate (ED) has unearthed a mega scam of fraudulent foreign remittances worth Rs 15,000 crore, involving a number of dubious importers. The scam involves importers depositing fake bills of entries (of imports) in banks and remittances are made to unknown people outside India.

"We are investigating the case under the Foreign Exchange Management Act (FEMA)," a top ED official told dna.
Six leading banks -- ICICI Bank, IndusInd Bank, ING Vysya, YES Bank, Kotak Mahindra Bank and Bank of India – were hit by the scam.

"Out of the Rs 15,000 crore of fake bill entries, we have so far established around Rs 4,000 crore. We have asked banks to lodge FIRs against all these importers and the banks have agreed. The transaction happened from 2011 till May 2014," a senior ED official, who is investigating the case told dna.
Most banks chose not to respond to dna's repeated queries.

What was the modus operandi?
As per ED sources, dubious importers submitted forged bills of entry and other import documents to banks with the intent to fraudulently remit foreign exchange. "Multiple duplicates of each bill of entry were made and submitted to different banks to show legitimate imports and to illegitimately remit huge foreign exchange outside India," said sources close to ED.

Who are the importers under ED's net?
Kanika Gems, Charbhuja Diamonds, Sambhav Exports, Keshav Impex, Pulkit Impex and Yogeshwar Diamonds, among others. "We are probing the importers' background and checking with banks if due diligence and KYC were done properly. These fake bills of import might have been used for gold smuggling," a senior official told dna.

Is black money involved here?
"By using these dubious entities, black money in the country is sent abroad, especially to tax havens like Mauritius, British Virgin Islands and Cayman Islands without paying any tax, an Income-Tax official told dna. A couple of days back, a special team of ED officials searched a regional branch office of Uco Bank in Mumbai and Chandigarh and recorded the statements of top officials. So far, it has been found that no due diligence or KYC has been carried out in the advance remittance process of exports, said one ED official.

What's the total worth of fake bills?
ING Vysya Bank has made 735 fake import remittances worth $264.3 million while Kotak Mahindra Bank made 734 fake remittances worth $187.9 million. dna has copies of fake entries made in banks. IndusInd Bank made 275 fake entries worth $88.2 million, and ICICI Bank reported 91 worth around $36.4 million.

Are bank officials also involved in the fraud?
Bank officials are already under ED scanner. "Banks are supposed to share details of suspicious transaction to FIU (Financial Intelligence Unit). But they (banks) have not done so. We are investigating if it is just negligence or part of conspiracy by bank officials," said ED.

What does ED suspect?
"Prima facie, there is clear negligence by some bank officials while dealing with these suspicious importers. We suspect collusion. Once we get strong evidences against these officials, the case details will be handed over to the Central Bureau of Investigation (CBI) for further action," the source said.

What's the ED advice to banks?
Faced with a surge in trade-based money laundering and hawala scams, especially in Mumbai, Delhi and Gujarat, the ED had alerted banks and asked them to be more vigilant while transferring large funds, as reported by dna on November 20, 2014. The directorate had asked banks to plug loopholes and check the growing menace in a meeting attended by top compliance officers and Money Laundering Reporting Officers of banks.

 http://www.dnaindia.com/mumbai/report-rs-15000-crore-remittance-scam-hits-six-banks-2050352

Autonomy for PSU banks, no call from PMO: Modi-Times of India

PUNE: Prime Minister Narendra Modi on Saturday assured state-run banks that the government wouldn't interfere in their day-to-day operations — a statement that came as a major morale booster for bankers who have had to deal with not just political appointments on boards but messages to dole out loans and other favours in the past.

"The Prime Minister (Narendra Modi) has told bankers that they will not get a call from even the PMO," financial services secretary Hasmukh Adhia quoted Modi as saying at the first Bankers' Retreat here.

An official statement said the PM also assured top executives from the public sector that the banks would be run professionally. "He said the government had no vested interest and public sector banks can derive comfort from it," it said.
Modi's assurance came hours after finance minister Arun Jaitley told reporters that "banks have to be given a sufficient amount of leeway to deal with commercial issues with a commercial mindset and articulated the need for "far greater autonomy".

Though the PM promised a free hand, he did point to his support for "political intervention, in the interest of the people", a statement that was seen as a message that lenders would be asked to implement schemes such as the Jan Dhan Yojana and fund affordable housing projects, which Modi identified as a priority project.

Sources said the bankers told the government that they would appreciate if they were not burdened with intrusive scrutiny and red tape even as decisions often amounted to a judgment call.

The other message that came from Modi was his advice to bankers to create entities that rank among the top few globally. "The PM said the banking sector of a country mirrors its economic rise. Japan and China had banks in the top 10 banks of the world during their economic rise," the official statement said.

At the same time, both the government and RBI underlined the need to deal with bad debt and enhance the capital base to help banks meet large funding requirements in the coming years. This was seen as an important measure to speed up economic growth.

PM Narendra Modi's (right) assurance came hours after finance minister Arun Jaitley told reporters that "banks have to be given a sufficient amount of leeway to deal with commercial issues with a commercial mindset and articulated the need for "far greater autonomy".

While Jaitley said that non-performing loans were at "unacceptable levels in some cases", Rajan said that in the short run there was a need to clean up and then restructure other stressed loans to put the economy back on track.

The comments came even as bank chiefs and executive directors who had gathered for the two-day brain storming session suggested that the government should refrain from launching schemes such as the loan waiver programme undertaken by the UPA government on the eve of the 2009 general elections.

While the scheme was seen as a key element of the Congress-led coalition's return to power, it came as a blow for banks as loan defaulters gained at the cost of those paying their installments on time.




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