Deposits in Jan Dhan bank accounts have fallen after the government’s recent measures to ensure that they are not being used to launder black money. On December 2nd and 1st, inflows into Jan Dhan accounts reduced to Rs 410 crores and Rs 389 crores respectively, according to this income tax department circular.
It added that for the week ended November 30, deposits reduced to Rs 4867 crore from Rs 11,347 crore at the end of November 22. Deposits for the week ended November 15 shot up to Rs 22,206 crore. The figures corroborates with the data on Jan Dhan’s website. For the week ended November 23, Jan Dhan accounts held Rs 72,834.72 crore from Rs 64,252.156 crore from the week ended November 16. The demonetization drive was started on November 8 and the balance in Jan Dhan accountsstood at Rs 45,636.60 crore as of November 9.
Last month, the Reserve Bank of India (RBI) placed withdrawal limits on Jan Dhan accounts. Fully KYC compliant Jan Dhan account holders will be allowed to withdraw Rs 10,000 in a month while limited or non KYC compliant account holders will be permitted to withdraw Rs 5,000 per month.
The RBI added that branch managers may allow withdrawals beyond Rs 10,000 within the current applicable limits (Rs 24,000 per week) only after ascertaining the genuineness of such withdrawals and duly documenting the reasons on the bank’s record.
Opening multiple accounts to launder money
There have been a number of instances where bank employees have been giving advice to individuals who wish to evade taxes and launder black money.
CNN Network 18 has a report which shows that some private bank employees are helping people who wish to launder black money by opening different accounts. The video shows an Axis Bank employee in Sonipat who is advising an undercover reporter to open multiple accounts and deposit Rs 2.5 lakh to avoid the tax radar. He further advises the undercover reporter not to use an Aadhaar card for opening the account as it can be traced by the government. Watch the video here.
Yesterday, the Central Bureau of Investigation (CBI) arrested Senior Special Assistant of the RBI in Bengaluru for his alleged involvement in currency exchange. RBI officer K Michael and two other persons were arrested on charges of money laundering activities and unaccountable cash of Rs 16 lakh in new currency notes was recovered from their possession.
No change in zero balance accounts
However, it is curious to see that the overall number of zero balance accounts has only marginally decreased following the demonetization. At the end of the week ended November 9, the number of zero balance accounts stood at 5.93 crore compared to 5.92 crore at the end of December 7.
Note that a large number of the accounts opened through public sector banks have been dressing up their data to show lower number of zero balance accounts. A report from Indian Express points out that public sector banks have been adding Re 1 in these accounts to give the appearance that they are being used by people. RTI information from 18 public sector banks and 16 regional banks showed 1.05 crore accounts only held Re 1 balance in them. There were a few cases where Rs 5 or Rs 10 was deposited by banks.