New Delhi: The Jammu and Kashmir Bank (J&K Bank), already facing a corruption investigation, could be in for more trouble as the National Investigation Agency (NIA) may probe the bank’s alleged role in an ongoing terror-funding case.
According to a source in the home ministry, the agency has flagged several discrepancies in the functioning of the bank, hinting at suspected “dubious activities” that may be linked to terror financing.
During the course of investigation into a terror-funding case of 2017 that saw the arrest of JKLF leader Yasin Malik, Dukhtaran-e-Millat leader Asiya Andrabi, separatist leader Shabir Shah of the JKDFP and Masrat Alam of Muslim League among others, the NIA is said to have found that all the accused held accounts in the bank but did not have any valid documents for them.
“During questioning of the accused, when the NIA sought their account numbers, and when they went back to check transactions made through those accounts, they realised that most of those accounts were either opened fraudulently or without proper procedure,” said another source in the ministry.
The NIA has allegedly found that the bank did not follow any KYC (Know Your Customer) norms, the accounts were not linked to respective PANs (Permanent Account Numbers), and there were no phone numbers or proper address proofs in the documents used to open these accounts.
Despite repeated calls and texts to the J&K Bank spokesperson, there was no response. This copy will be updated if and when the bank responds.
The NIA action will spell more trouble for the bank after the Anti-Corruption Bureau (ACB) of Jammu & Kashmir Police earlier last month claimed to uncover a racket in which loans to the tune of Rs 1,000 crore were diverted. The bank’s chairman, Parvez Ahmed, was dismissed following this.
With the ACB sharing details of the alleged scandal, the CBI and the Enforcement Directorate (ED) are to be roped in as the case will require a forensic audit by a specialised agency.
While CBI has a specialised unit for bank fraud cases that investigates high-value cases and corruption, the ED will focus on money laundering.
‘Unsecured loans given without paperwork’
The NIA has also conveyed to the home ministry that unsecured loans were given by the bank without any collateral, ThePrint has learnt.
In addition, the second source quoted above said, huge amounts of money were disbursed in the name of CSR (Corporate Social Responsibility) activities without maintaining proper accounts.
“There is no check on the loan given,” the source said. “Money is pouring in and is being withdrawn without any records, without any identification of the source.”
According to yet another source, when NIA gave the bank a few account numbers and asked for their transaction details, the bank did not have any data available. “The bank was unable to produce any data or details of those accounts, not even the phone numbers against those accounts,” said the source.
‘Lot of cash deposits, but no information on the source’
The NIA probe has also revealed that credit cards are being used as cash cards and that data was being maintained manually, ThePrint has learnt. “There were a lot of cash deposits that were done in those accounts, but the data of the source from where the money came was unavailable. Even the deposit slips that are used to put money in accounts were not available with the bank,” the third source said. “It is bizarre that a bank is functioning after flouting so many norms. It is like a personalised bank being used for dubious activities.”
The source said the bank had not even shared that annual information reports with FIU (financial intelligence unit). “No data was being shared with FIU.”
Banks are required to maintain and preserve information in respect of transactions with its client in hard and soft copies and report information of all suspicious transactions to the director, financial intelligence unit.