The total amount of illegal overseas remittances made through a Bank of Baroda branch on the pretext of imports, which is being probed by the Central Bureau of Investigation and the Enforcement Directorate, has been scaled down from Rs. 6,172 crore to about Rs. 3,200 crore.
“The bank had initially quoted overseas remittances to the tune of Rs. 6,172 crore, based on an internal audit. Following a review, the bank then brought it down to Rs. 5,100 crore. However, the latest figure stands at Rs.3,200 crore,” said an officer.
The agencies are investigating the transactions made through 59 bank accounts that were opened with an Ashok Vihar branch of Bank of Baroda here, allegedly in conspiracy with two bank officials. The money was transferred to Hong Kong and Dubai.
Most of the accounts were in the name of import firms, which had furnished fake addresses. Investigations revealed that identification papers of slum dwellers, drivers and street vendors were used to set up these shell companies, for which they were paid Rs. 10,000-15,000 a month.
The agencies found that unscrupulous exporters resorted to trade-based money laundering to get undue duty drawback incentives. They would overvalue their goods and send them to their conduits in the same country as that of end buyers. The middlemen would transport the goods to the end buyers, for which they would get genuine payments. However, using inflated invoices, they would pay extra amount to their Indian accomplices, on the basis of which the exporters claimed duty drawback.
The arrangement resulted in deficit of funds on the part of the middlemen and to overcome the shortfall, the differential would be pushed into the banking system through small undetectable deposits made by entry operators in a large number of accounts in India. Once into the banking channel, the total amount would be diverted to the current accounts of shell companies.
