Maharashtra: Urban Credit Coop Bank in trouble over bank accounts without PAN

The Income Tax Department conducted raids at the headquarters and branch of an Urban Credit Cooperative Bank in Maharashtra. According to a statement issued by Central Board of Direct Taxes over 1,200 bank accounts were opened in the branch without PAN

Mumbai: The Income Tax Department conducted search and seizure operations at the headquarters and branch of an Urban Credit Cooperative Bank in Maharashtra. The Central Board of Direct Taxes (CBDT) on Saturday said that Rs.57.72 crore were restrained during the raids conducted on October 27.

The CBDT revealed that search operations were also conducted at the residences of the chairman and one of the director's of the banks. It also said that severe irregularities came to the surface after the bank data on Core Banking Solutions (CBS) and the statements of key persons were recorded during the raids.

According to a statement issued by the CBDT over 1,200 bank accounts were opened in the branch without PAN.

"More than 1,200 new bank accounts were opened in the said branch without PAN. The investigations have revealed that these bank accounts were opened without following KYC norms and all account opening forms are filled in by the bank staff and they have put their signature/thumb impressions," the CBDT statement reads.

It further stated that several cash deposits each of the same denomination of Rs.1.9 lakh were made totalling Rs53.72 crore.

"Out of these, more than 700 bank accounts have been identified which were opened in series, where cash deposits of more than Rs34.10 crore were made immediately within 7 days of the opening of bank accounts mainly during the period August 2020 to May 2021," the CBDT statement reads.

It also said that the deposits were structured to avoid the mandatory requirement of PAN, which is needed for deposits over Rs2 lakh. The CBDT said that that the cash was later converted into fixed deposits at the same branch and inquiries into some cases of such account holders revealed that they were not aware of any such deposits in the bank and denied knowing anything about such bank accounts and the fixed deposits.

The chairman and managing director of the bank, director and branch manager failed to explain the source of the cash deposits and admitted that they were done at the behest of one of the directors of the bank who is a prominent local businessman engaged in grain trading.

The CBDT also said that further investigation was going on.