A senior Reserve Bank of India (RBI) official was arrested in Bengaluru on Tuesday for allegedly being involved in the illegal conversion of demonetised notes.
K Micheal, arrested by the CBI, allegedly helped the touts exchange Rs 1.51 crore, reported NDTV.
Reacting to the news of Micheal’s arrest, SS Mundra, one of the deputy governors of RBI said that in an operation of this size, there are always elements who will behave in ways that are fraudulent and reprehensible.
He also said that the RBI is keeping a vigil on all such activities. Mundra claimed that the concerned employee is only a junior functionary of RBI, as opposed to what is being reported. He added:
The concerned employee has been suspended, we have instituted investigation. Action will be taken once details are known.
Earlier in the day, seven middlemen were also arrested in a series of raids, in which Rs 93 lakh in new currency was seized in Karnataka’s capital city Bengaluru.
Officials said the agency placed the seven, including the relative of a government official, under arrest late on Monday under provisions of the Prevention of Money Laundering Act (PMLA). Rs 93 lakh in new notes of Rs 2,000 have been seized, they added.
Officials said the action was taken as part of a probe in a case where the Income Tax Department had recently seized Rs 5.7 crore cash in new currency and the ED had booked a money-laundering case against a government engineer and others based on a CBI FIR in the case.
The modus operandi adopted by the alleged middlemen, officials said, was unearthed after ED officials launched a special operation. They themselves posed as ‘customers’ looking to get old currency changed illegally after paying commission to the said middlemen.
Officials said the probe found that these alleged middlemen were reportedly charging a commission between 15-35 percent and were executing the racket of illegal conversion of new notes in alleged connivance with bank officials.
They said the agency suspects that there is a chain of middlemen involved in converting black funds into white, even as they added that the probe in continuing.
The accused persons are expected to be produced in a local court in Bengaluru for further custody.
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