This co-operative bank received Rs 169 crore in just 5 days, post demonetisation

After demonetisation was announced by Prime Minister Narendra Modi on Nov 08, banks were flooded with old notes and Malabar District Co-operative Bank (MDCB) in Malappuram in Kerala took things to a new level.

In a raid conducted by CBI team, it was found that the bank received deposits of scrapped currency notes worth Rs 169 crore during the first five days after the demonetisation of old notes was announced on November 8.

The agency has asked the bank to produce all documents related to depositors, though the bank's authorities already seem to be partly washing their hands off by citing ambiguities in RBI guidelines related to sharing of KYC details of deposits from primary cooperative societies as opposed to the cooperative bank's own branches.

As per the investigations, it was found that Rs 169 crore was deposited between November 10 and 14 in 54 branches and 296 cooperative societies including 140 co-operative banks which function under MDCB.

So in total, the bank deposited a total of Rs 84 crore and societies deposited currency worth Rs 85 crore in the bank during the five days.

The agency has saught clarification regarding the Rs 97 crore balance in the bank on November 10. The raid was conducted as part of the ongoing drive to check whether accounts operated in district cooperative banks have been used since demonetisation to launder money.

Bank authorities denied reports that money laundering was involved and clarified that all branches of the bank have followed KYC norms while receiving deposits.

"It is not our responsibility to check the source of the money deposited by each person in bank branches. But, as we followed KYC norms, we can share the details of customers with the investigation agency," Pradeep Menon, vice-president of MDCB, told ET.

At the same time, he added that as there was no direction from RBI to follow KYC norms while receiving deposits through cooperative societies, the bank had limitations in sharing details of such investors with CBI.