N Sundaresha Subramanian | Business Standard--- New Delhi March 15, 2013 Last Updated at 14:02 IST
How to launder money and live happily ever after
There are only two requirements: you need to have serious amount of money and a PAN card
First of all, you should have a lot of black money, say a few crores of rupees. Salaried employees like you and me will be shooed away to what the private bankers in the Cobrapost video derogatorily call “rickshaw-wallah” banking.
In Rickshaw-wallah banking, there will be no one to help you hoodwink the “well-defined KYC(Know your customer) and AML (Anti-money laundering) systems” banks claim they have. You will be on your own and are most likely to get yourself into trouble, sooner than later.
But if you have serious money, then you will be eligible for private banking services and like Paulo Coelho says, the whole universe will conspire to make things happen for you.
But if you have serious money, then you will be eligible for private banking services and like Paulo Coelho says, the whole universe will conspire to make things happen for you.
You don’t need to give too many details about yourself. If you have a PAN card for identity it’s fine. You should be ready to spare the money for five to 10 years.
Your relationship manager has full knowledge of his bank’s checks and balances. He knows what the compliance department will be looking for and how to skip the suspicious transaction reports.
He will offer to create a “channel” through which you can deposit cash over and above permissible. If you have wife and children, he advises you to open accounts in each of their names. Thus you can deposit up to Rs 2.5 lakh (each account can accept up to Rs 50,000 in cash without PAN). A further Rs 2.5 lakh can be deposited through demand drafts of Rs 50,000 in each of the accounts.
Your relationship manager has full knowledge of his bank’s checks and balances. He knows what the compliance department will be looking for and how to skip the suspicious transaction reports.
He will offer to create a “channel” through which you can deposit cash over and above permissible. If you have wife and children, he advises you to open accounts in each of their names. Thus you can deposit up to Rs 2.5 lakh (each account can accept up to Rs 50,000 in cash without PAN). A further Rs 2.5 lakh can be deposited through demand drafts of Rs 50,000 in each of the accounts.
If you have problems with involving your children and family, you can open different accounts using each of your different ID proofs. Some managers offer to create one bank account each for PAN card, Voters ID, Driving Licence, Aadhar and Passport. The multiple accounts are opened on different dates to avoid triggering the suspicious transaction alerts.
After depositing a few lakhs through these accounts this money is then invested in insurance policies of terms 10-15 years. After the mandatory lock-in is over, you can withdraw the money, which would be credited to your account, striking white. The manager advises you to withdraw in tranches to avoid detection.
In case you don’t want to put all eggs in India, you can send some of the coloured money abroad. You can transfer Rs 10 crore for a fee of Rs 10 lakh. Your manager can arrange it for you. If you have lesser amounts, you can use travel currency debit cards.
If you don’t want all these hassles, you can just take a big size locker and convert all the money you have in to the highest denominator notes say Rs 1000 notes and stash it in there. After doing all these, you need not be scared about the traces you have left behind. The manager erase these for you. Also, nobody else in the bank would know what is in your account. If somebody in the bank tries to open your private banking account. It won’t show the balance. Only your relationship manager’s ID will pop up.
After depositing a few lakhs through these accounts this money is then invested in insurance policies of terms 10-15 years. After the mandatory lock-in is over, you can withdraw the money, which would be credited to your account, striking white. The manager advises you to withdraw in tranches to avoid detection.
In case you don’t want to put all eggs in India, you can send some of the coloured money abroad. You can transfer Rs 10 crore for a fee of Rs 10 lakh. Your manager can arrange it for you. If you have lesser amounts, you can use travel currency debit cards.
If you don’t want all these hassles, you can just take a big size locker and convert all the money you have in to the highest denominator notes say Rs 1000 notes and stash it in there. After doing all these, you need not be scared about the traces you have left behind. The manager erase these for you. Also, nobody else in the bank would know what is in your account. If somebody in the bank tries to open your private banking account. It won’t show the balance. Only your relationship manager’s ID will pop up.
Trust your private banking relationship manager, launder your money and live happily ever after.
Financial sector players exploiting customers: Parekh
Veteran banker and HDFC Chairman Deepak Parekh on Friday said companies, particularly those in the financial sector, exploit customers by mis-selling products. "Many consumers still remain a victim to unscrupulous and exploitative practices which could manifest in various forms such as mis-selling of products, particularly financial products," Parekh said at an award function.
He, however, said the financial sector was very well regulated and there were ways of redressal available with aggrieved parties.
"As far as our financial sector is concerned, fortunately we are at a good regulated conditions. Even in terms of redressal facilities, regulation is in place," he said.
Parekh, however, refused to answer questions on allegations of money laundering against three large private sector banks, including HDFC Bank
He, however, said the financial sector was very well regulated and there were ways of redressal available with aggrieved parties.
"As far as our financial sector is concerned, fortunately we are at a good regulated conditions. Even in terms of redressal facilities, regulation is in place," he said.
Parekh, however, refused to answer questions on allegations of money laundering against three large private sector banks, including HDFC Bank
Black money: pvt banks warn staff of zero tolerance
ICICI Bank reiterated it had been; would conduct its business adhering to high standards of compliance to law, regulations
A day after Cobrapost, an online magazine, made money laundering allegations against ICICI Bank, HDFC Bank and Axis Bank, several private banks have swung into action and asked their employees to strictly obey the compliance standards and desist from making illegal promises to customers to get new businesses.
In a communication to employees, ICICI Bank reiterated that it had been and would conduct its business adhering to the high standards of compliance to law and regulations. “ICICI Bank always puts 'compliance with conscience’ above anything in conducting business and has zero tolerance to any violations of its code of conduct,” a spokesperson of the bank said.
Rana Kapoor, founder, managing director and chief executive of YES Bank, wrote a letter to his employees and said he wanted to make it clear to every YES banker that even a single violation of the AML (anti-money laundering) and KYC (know your customer) regulations will be very seriously viewed by the bank's vigilance department and top management.
"I would further want retail operations and corporate operations, including operations of risk management and central vigilance reporting to Kapil Juneja to ensure that we do not have a single violation of this nature in YES Bank. I expect a clear report to be submitted to me no later by Friday, March 15," Kapoor added.
A senior executive at IndusInd Bank said "we have been doing it consistently for many years. At the end of every quarter our managing director stresses on the need to follow the compliance culture, avoid mis-selling, and adhere to ALM and KYC norms. It is an ongoing activity and in the wake of recent events it will be reiterated,"
Cobrapost had claimed that its undercover investigation revealed that top three private banks offered money laundering as product to their customers and violated several provisions of the Income Tax Act, Foreign Exchange Management Act (FEMA), Prevention of Money Laundering Act and regulations mandated by the Reserve Bank of India (RBI).
While bankers claim that employees are advised not to violate norms at periodic intervals, a fresh set of communication mandating strict adherence to compliance were sent after Cobrapost's allegations on Thursday.
"After yesterday's event, we sent a message to our employees asking them to be more vigilant. We take any violation in compliance very seriously and have zero tolerance towards offenders," N Kamakodi, managing director and chief executive officer at City Union Bank, told Business Standard.
Karur Vysya Bank's senior executives met on Thursday evening to review their systems and processes to ensure that they are alerted in case of any violation of norms.
"I am not alarmed and reasonably sure that this kind of things does not happen in our bank. But just to be cautious we are re-examining our systems and processes. We want to ensure that our system is robust enough to detect any transaction, which fails to comply with the regulations," K Venkataraman, managing director and chief executive officer at Karur Vysya Bank, said
In a communication to employees, ICICI Bank reiterated that it had been and would conduct its business adhering to the high standards of compliance to law and regulations. “ICICI Bank always puts 'compliance with conscience’ above anything in conducting business and has zero tolerance to any violations of its code of conduct,” a spokesperson of the bank said.
Rana Kapoor, founder, managing director and chief executive of YES Bank, wrote a letter to his employees and said he wanted to make it clear to every YES banker that even a single violation of the AML (anti-money laundering) and KYC (know your customer) regulations will be very seriously viewed by the bank's vigilance department and top management.
"I would further want retail operations and corporate operations, including operations of risk management and central vigilance reporting to Kapil Juneja to ensure that we do not have a single violation of this nature in YES Bank. I expect a clear report to be submitted to me no later by Friday, March 15," Kapoor added.
A senior executive at IndusInd Bank said "we have been doing it consistently for many years. At the end of every quarter our managing director stresses on the need to follow the compliance culture, avoid mis-selling, and adhere to ALM and KYC norms. It is an ongoing activity and in the wake of recent events it will be reiterated,"
Cobrapost had claimed that its undercover investigation revealed that top three private banks offered money laundering as product to their customers and violated several provisions of the Income Tax Act, Foreign Exchange Management Act (FEMA), Prevention of Money Laundering Act and regulations mandated by the Reserve Bank of India (RBI).
While bankers claim that employees are advised not to violate norms at periodic intervals, a fresh set of communication mandating strict adherence to compliance were sent after Cobrapost's allegations on Thursday.
"After yesterday's event, we sent a message to our employees asking them to be more vigilant. We take any violation in compliance very seriously and have zero tolerance towards offenders," N Kamakodi, managing director and chief executive officer at City Union Bank, told Business Standard.
Karur Vysya Bank's senior executives met on Thursday evening to review their systems and processes to ensure that they are alerted in case of any violation of norms.
"I am not alarmed and reasonably sure that this kind of things does not happen in our bank. But just to be cautious we are re-examining our systems and processes. We want to ensure that our system is robust enough to detect any transaction, which fails to comply with the regulations," K Venkataraman, managing director and chief executive officer at Karur Vysya Bank, said
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