Indian tax authorities suspect the involvement of bankers in an illegal exchange of money following the seizure 60 million rupees (US$878,792), including the new 2,000 notes, and 7kg of gold jewelry during raids in three cities on Thursday.
Income tax investigators are surprised that of the total cash seized, 47 million rupees were denominated in the new 2,000 rupee bank note and the remaining 13 million rupees were in 100 bills and the scrapped 500 notes.
Under the central bank’s new rules, individuals can withdraw only 2,000 rupees per day from ATMs and a total of 24,000 per week from over the counter transactions.
Tax officials suspect that the new notes and the bullion were illegally obtained in the exchange of demonetized 500 and 1,000 rupee notes, and that some entry operators and bankers may be involved in the fraud considering the largest volume of new currency notes seized, the Deccan Herald reported.
This is the largest seizure of new notes after demonetization was announced on November 8. In fact, tax officials had to call in note counting machines and additional staff to tally the value of the cash.
More than 50 tax investigators and police conducted the early morning raids on 10 premises in Bangalore, Chennai and Erode in Tamil Nadu state, the Herald reported.
The Bangalore raids targeted the homes of two senior government engineers and two contractors, the paper said.
Tax authorities raided the homes of T.N. Chikkarayappa, managing director for Kavery Neeravari Nigam, and S.C. Jayachandra, chief project official for Karnataka State Highway Development Scheme under the public works department, The New Indian Express reported.
Besides cash, tax officials seized 7 kg of gold jewelry, a Porsche and a Lamborghini.
During the raids, tax officials also found a number of identity cards which could have been used to illegally change the old currency with new ones. They also seized documents on property purchases from the premises.
Commenting on the raids, an angry man standing in a queue at a bank said, “A few minutes back, a couple of cops arrived here with two steel boxes and left with a huge amount of new notes in it. Where were they heading? To ATMs or to the bungalows of VIPs?”
Thursday’s raids come a day after the Enforcement Directorate seized 100,000 rupees denominated in new 2,000 notes from the premises of a Kolkata-based doctor.
During nationwide search operations at 40 locations on Wednesday, new notes valued at about 10 million rupees had been seized.