Preserve CCTV footages to spot currency hoarders: RBI to banks

Mumbai, December 13

RBI has asked banks to preserve CCTV recordings of operations at bank branches and currency chests to help law enforcement agencies in identifying people engaged in hoarding of new notes post demonetisation.

The Reserve Bank, in a notification issued today, said banks should "preserve CCTV recordings of operations at bank branches and currency chests for the period from November 8 to December 30, 2016, until further instructions".

The Central bank said the move will "facilitate coordinated and effective action by the enforcement agencies in dealing with matters relating to illegal accumulation of new currency notes".

Earlier in October, the RBI had asked banks to cover the banking hall/area and counters under CCTV surveillance and recording and preserve the recording to help identify people abetting circulation of counterfeit notes.

After demonetisation, there have been reports of hoarding of new currency notes by unscrupulous elements at various bank branches across the country.

The Income Tax Department is carrying out raids across the country on a regular basis since demonetisation to nab new currency hoarders and several people, both individuals as well as bank officials, have been booked so far for carrying out such illegal activities.

The government has said abolishment of these high denomination banknotes is intended to bring back unaccounted money into the system, curb fake currency circulation as well as to deter terror financing.

Banks asked to do central data checking

With more and more instances of money laundering and fraudulent currency exchange surfacing, the RBI warned of stern action against wrongdoers and asked banks to carry out a thorough central data checking, while it suspended a "junior functionary" who is being investigated.

"We have issued elaborate instructions to all banks to do the central data checking and wherever they find any inconsistency, it should be pursued further through their internal audit mechanism," said RBI deputy governor SS Mundra said, speaking to a select group of reporters here.

"Our supervisors are also carrying out similar exercise on various data points of banks and wherever any untoward kind of transactions or actions are noticed, due action would be pursued and due investigation would be carried out," he said.

He denied the reports that RBI had issued show-cause notice to Axis Bank and was planning to cancel its banking licence following massive malpractices in currency exchange at many of its branches.

"There is no such thing at this point of time. As I mentioned a while ago, wherever any such actions are reported, the enquiries are being made but as of now no show-cause notice has been issued (to Axis Bank)," Mundra said.

Stating that many instances of money-laundering have come to the RBI's notice, he said already banks have taken action against the staff who were involved.

About the arrest of an RBI official in Bengaluru earlier on Tuesday, Mundra said: "Let me clarify it is a junior functionary of RBI and it was reported by the investigating agency that he was recorded to be present in a bank branch where this kind of transaction was happening. We have suspended the employee and have instituted investigation and due action will be taken once the details are known.”

"RBI and its team is also coordinating and collaborating with various investigating agencies." — PTI