Mumbai: It had been shocking news for India as about Rs. 4,400 crore of Black Money had been sent out of India mainly to trading hubs like Dubai and Hong Kong in last six months. The Enforcement Directorate (ED) had seized Rs. 83 lakh from a bank locker in south Mumbai.
It is one of three cases the agency is investigating for suspected hawala-type transactions using the banking system of India.
In the three cases under investigation, a total of about Rs 4,400 crore ($700 million) was sent out of the country. The ED suspects the actual amount could be three times that detected.
It believes that money running into thousands of crores is illegally sent abroad either as advance remittance for import of goods or by using forged import documents submitted to banks. As a result, the country suffers substantial loss of foreign currency.
A source said the accused took advantage of lacuna in the banking system to commit the fraud and there is no strong law to deal with the matter.
He call it a sophisticated hawala-like operation and said money, most often obtained illegally, is being sent abroad through normal banking channels.
He said fake companies are registered and accounts opened in leading banks and co-operative banks. Cash is first deposited in the co-operative banks and transferred from account to account several times to obscure its source.
After it reaches a big bank, of course, through an online transaction, payments are made towards advance remittances for imports. Also, fake import documents are produced. The source said it is obvious that the racket cannot be carried out without the connivance of some bank officials. “Without their involvement, such an elaborate fraud cannot be carried out.”
He said the money is received abroad by the racketeers’ foreign partners, who withdraw the sums in foreign currency.
Source said, “Thus, without importing anything, we are making payments in dollars. This is a loss for the country, a loss for India’s banks.”
Bureau Report
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