BY: Arunima Sodhani
The Cobrapost exposé is a sting operation codenamed The Red Spider conducted by online media firm Cobrapost. The operation, which has been going on for over a year, revealed on March 15th, 2013 the videos of a number of executives of 3 private Indian banks blatantly offering the conversion of black money to white.
Over the past year, a representative of Cobrapost visited 50 odd branches of HDFC Bank, ICICI Bank and Axis Bank across various cities along the length and breadth of the country such as Delhi, Mumbai, Chennai, Hyderabad, Vellore, and Kolkata among others, posing as the front-man of an unnamed politician who wants to convert his black money into white, and he was welcomed with more than just open arms. Branch managers and vice presidents alike were willing to bend backwards to accommodate the politician and provided a foray of ways in which huge amounts of black money could be, and has been in the past, invested without leaving a questionable trail. As stated by the banks representatives there are various ways to circumvent the Income Tax Act, Foreign Exchange Management Act, Anti Money Laundering Act, and KYC Norms, some of which include: splitting the money and investing it in a diversified portfolio including insurance schemes and gold; transferring the money abroad as remittances; transferring the money to an NRO account; opening accounts for investment and then closing them at will; allotting lockers for safekeeping the money; using dummy accounts of banks for investment purposes. And all this with keeping the identity of the client (a fictitious politician) secret, without using the mandatory PAN card. The unsuspecting bank officials were caught audaciously offering all these measures to legitimize hoards of illegal money, claiming that these are tried and tested methods, used by many other clients in the past. Some even offered to come to the politicians residence along with a counting machine to collect the cash.
The stocks of said banks are falling as this article is being written, but lawyers have said that the employees who have been caught on camera cannot be convicted on the basis of these videos as there is no proof of the transactions taking place. However action may be taken if evidence of past fishy transactions is unearthed. While internal probes of the banks have been ordered by the higher authorities of the banks, CBDT and RBI may also step in to investigate the matter.
The inefficiency on the part of the state in keeping a check on such money laundering activities comes to light through such an uncomplicated operation of a person posing as a walk-in customer with a hidden camera, which also reduces the 3 most trusted banks of the nation to avaricious criminal syndicates.
But in the end, the royal fool is the honest taxpayer whose biggest mistake is not approaching these banks to save his tax and invest it in a plethora of law circumventing and profit yielding avenues. The number of ways this system provides the people to cheat the government is not only chilling but is in keeping with the number of ways politicians cheat the people.