I-T dept unearths Rs500 cr scandal in city bank

MUMBAI: The Income-Tax department has unearthed a scandal involving at least Rs500 crore at the Mohammed Ali Road branch of the Development Credit Bank (DCB).

The department initiated a probe after the Reserve Bank of India found anomalies in the bank’s transaction detail reports.

Several individuals holding business/current accounts with the branch were found to have evaded the banking cash transaction tax (BCTT) though they were making heavy withdrawals.

An Income-Tax officer said that over the last month, the individuals made multiple withdrawals from these accounts every week, sometimes to the tune of Rs1.5 crore from a single account in a day. But when the department tried to trace these individuals, it reached a dead-end: the addresses given were false.

The officer said the money from these benami accounts is suspected to have been used in property transactions, or purchase of jewellery and imported cars. “We are also investigating an underworld link to the withdrawals,” he said.

The department has a list of about 40 accounts from which the heavy withdrawals were made. The officer said the bank’s manager initially did not cooperate. “But later he relented.”

An email sent to DNA by the bank management said: “All banking transactions in DCB are conducted keeping within the RBI framework and guidelines, which are meant for all commercial banks in the country. Also, the bank is not under the scanner of any government department or agency.”