Media website Cobrapost Monday presented evidence that the money laundering racket in this country was happening on a massive scale with at least 23 financial services companies, including state-owned banks, LIC and private insurers, being party to it.
Also read: LIC, SBI, pvt insurers part of money laundering
An extract from the Cobrapost release on how banks and insurers are helping their customers launder money:
*Accept huge amounts of unaccounted cash to invest it in insurance products, and sometimes in gold as well.
*Open an account to route the cash into various investment schemes of the bank or insurance arms.
*Do it even without the mandatory PAN card or adhering to KYC norms.
*Arrange forged PAN cards to facilitate investment of huge unaccounted cash.
*Split the money into tranches, below the reporting threshold, to get it into the banking system without being detected.
*Use accounts of other customers to channelize the black money into the system for a fee.
*Get demand drafts made for the client either from their own banks or from other banks to facilitate investment without it showing up in the client’s account.
*Keep the identity of the investor secret.
*Open multiple accounts to invest the unaccounted cash directly in cash-investment schemes.
*Buy as many policies as you can to accommodate the huge unaccounted cash.
*Open an account in some extension branch a couple of months before the investment matures, credit the returns in that account and close it as soon as you withdraw all your money. The point: Extension branches are seldom audited.
*Advise the investor to remain invested for a certain number of years, say, 7 years, to keep the taxman at bay.
*Allot as many lockers as the client needs for safekeeping the illegitimate cash.
*Personally come to the residence of the client to take the black money deal forward and collect the cash, even bring along a counting machine.
*Use provisions like Form 61 to show the unaccounted cash as income from agriculture, making the investment of black money and returns thereof unquestionable.