Demonetization has not only helped eliminate black money, but has also helped get rid of the bad eggs in the banking system. As per available data, more than 100 bank officials have either been suspended or transferred for their malpractices during demonetization. Investigations are being carried out in certain cases, and if any of the bank employees is found guilty, they will be removed from their jobs.
While investigating such cases, investigators have come across some common techniques that bank officials used to misappropriate funds. One common trick was to open an account without fulfilling the KYC (Know Your Customer) rules, as specified by the government. After such a bogus account was created, money would be deposited in this account. Then, a DD (Demand Draft) would be issued for the amount deposited and the account would be closed the next day or soon after. The depositor could then easily get the DD cancelled and get all the money in new notes. This would leave no trace since the account was bogus and the depositor’s identity would have been hidden.
Another common method involved the use of the suspense account of the bank. Since transactions in this account are kept unclassified, scammers could easily deposit demonetized currency in the suspense account and later transfer it to various accounts. Other modes of fraud involved the use of loan foreclosures, backdated fixed deposits and new salary accounts opened for a firm.