Government releases details of cash deposits in banks after demonetization!

An official statement has been released by the government-post demonetization now.

“Starting from November 8, 2016 various reports were called for from the banks based on different thresholds of cash deposits made by different categories of persons. The reports were collated and analysed based on intelligence available in the Government data bases,” the official said.

After in-depth analysis, these reports have been disseminated to Income Tax Department, the Enforcement Directorate (ED) and other Law Enforcement Agencies.

The highlights are as following.

  • An estimated INR 3-4 lakh crore of tax evaded income has been deposited in banks
  • More than Rs 2 lakh deposited in over 60 lakh bank accounts
  • 60 lakh bank accounts saw new deposits of 7.34 lakh crore
  • Over 10,700 crore cash deposited in N-E states alone
  • 25,000 cr cash deposited in dormant bank accounts
  • 80,000 cr of repayment of loans was done in cash

How do we understand these figures further?

First and foremost, we now have an official record of what has really transpired, as far as the 50-day demonetization period is concerned. We are thankful to the Narendra Modi government for letting the Indian citizens know.

More importantly, it is the estimated illegal wealth (of INR 3-4 lakh cr), acknowledged in the official note. With government now stating this figure, what does it mean to us?

One thing is completely understood; that the government’s plan to entice common people to declare their tax-evaded income, has bombed. The government had revisited its options of imposing a penalty, by bringing it down to 50% penalty (as oppose to 200%). It means, that whatever amount was declared as unaccounted income by a person, 50% of (that amount), will be government’s money (as tax penalty).

Considering that the government has given enough warnings earlier too, this was the last option for the people. So, we can now expect some action from the government (since they have an estimated figure of this enormous wealth). Also, we should in all likelihood, expect the government to probe, how people really converted their black into white.

More than Rs 2 lakh deposited in over 60 lakh bank accounts sends a danger signal for all those people who followed a piecemeal approach. There were many people (with measured tokens of black money), who sought helps of relatives and friends. Friendly people deposited up to INR 2.5 old currency notes in their respective bank accounts. Otherwise, the rick exploited the poor. People also used Jandhan accounts to hide their unaccounted wealth.

We guess these people are also under the IT inspector radar now; and should have a valid explanation. They are as much culprits, by providing help to save the black money. In addition, the government is planning to probe all the accounts, which have never had deposits more that Rs 2.5 lakh, at any given point. Dormant accounts will be probed further too.

Of the 60 lakh bank accounts that saw more than Rs. 2 lakh of cash deposits, more than 6.80 lakh accounts have found matches in the existing database of various reports available with Government.

“These have been flagged while disseminating to I-T Department,” the official said, adding the details of cash deposits totalling more than Rs. 10,700 crore in different accounts in the North-Eastern states has also been disseminated.

Also, the I-T Department and ED have been provided with the details of cash deposits of more than Rs.16, 000 crore in different accounts of various kinds of cooperative banks.

Why North-east saw such huge deposits?

More than Rs. 10,700 crore cash was deposited in different accounts in the North-Eastern states since November 9, he said, adding the Income Tax Department and the Enforcement Directorate are looking into over Rs. 16,000 crore deposited in different accounts of cooperative banks.

Here are some identified reasons, which have proven that north-east region is a fake currency hub.

  • It is targeted to supplement militancy and other territories activities
  • 98% of North-east region in India is bordered by neighboring countries, and is therefore, an important target
  • Large inflow of illegal immigrants in exchange of cash
  • ISI is also believed to have infiltrated the banks here, as these banks lack management and manpower
  • Tribal areas have no taxes, so these areas rely on cash for their economic activity


Pooja Bhatia