Black to white: How money becomes legitimate

Black to white: How money becomes legitimate

 

Renukamata Credit Society, located in one of the oldest areas of Kalbadevi in Mumbai, has seen more than Rs 2,000-crore worth inflow and outflow of cash.

The small group accepts cash deposits of any amount and transfers it to anyone in any city on the depositor’s instructions. They follow a strict ‘no-question policy’ – which means no questions are raised on the funds, depositor or where the funds go.

According to a report in the Economic Times, there are no clues about the identity of the depositors. The IT wing has passed on the details to the Enforcement Directorate (ED) for further investigation. However, tailing it might prove to be a tough task.

The task of keeping these transactions ‘layered’ lies with intermediaries or handlers on the lookout for people, mostly small labourers or workers, who willingly share their personal details for a meagre Rs 2500-3000.

Some deposit slips have initials and first name of people who deposited the cash. But while there is an upper limit of Rs 9 lakh for deposits, there is no limit on number of transactions by an account holder. So multiple transactions worth Rs 9 lakh are common.

There are also no defaults here – the depositors fill e-KYC (know your customer) and admit to depositing the money.

This is not the only branch of Ahmednagar-headquartered Renukamata Society. The Society has various branches across Maharashtra and also in Chennai and Hyderabad.

Chairman, Prashant Bhalero told ET the credit society is registered under the Multi-State Societies Act, 2002.

He said people who want to avail their services have to first become the Society’s member by submitting photo ID, residential proof, thumb imprint and photograph. They also have to pay entry fee and share subscription amount.

Considering these multi-state co-operatives societies are safe haven for money launderers, there have been suggestions to bring them under the newly-introduced statement of financial transactions that record high-value transactions.

[Source”cnbc”]