Note ban: Finance Ministry asks banks to activate internal surveillance systems and report suspicious transactions immediately

Amid reports big cash deposits being made in some bank branches post demonetisation, the Finance Ministry has asked the lenders to activate their internal surveillance systems and immediately report suspicious transactions.

Refusing to be drawn into individual cases pertaining mostly to a private sector bank, Economic Affairs Secretary Shaktikanta Das said tax authorities are constantly getting information on large deposits through Financial Intelligence Units (FIUs).

Also, banks report such transactions through Suspicious Transaction Report (STRs) and based on that tax authorities scrutinise the source of funds, he told reporters in New Delhi on Thursday.

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“Let’s not take the name of any bank... let us not paint all the banks with same brush. Investigations (into large deposits being made) are conducted based on their report,” he said when asked about I-T raids on Axis Bank branches.

Das said information on huge amounts being deposited in banks post demonetisation are being processed based on inputs that CBDT gets from FIU and data analysis.

“When you see in a particular branch there is deposit of more than Rs 1 crore (and there are) too many cases, so naturally Income Tax department narrows down to that branch and tries to find the credentials of the depositor,” he said.

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Authorities will be able to trace the source as to where these notes were generated, he said, adding that Income Tax, Enforcement Directorate and, if required, CBI verify if the accounts are KYC compliant.

“All banks have been sufficiently sensitised to activate their internal surveillance, vigilance mechanism and report any suspicious transactions,” he said.

Since demonetisation of 500 and 1000 rupee notes, there have been reports of some people misusing Jan Dhan and dormant accounts for depositing unaccounted money.

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