Though, not a popular method, locker businesses could be a great tool to launder cash. It could be one of the mechanism of Placing the funds in the banking system. In 2011 a team of Enforcement Directorate raided a private vault service, similar to bank lockers, in the Connaught Place, B Block in New Delhi and recovered Rs 10 crore, all in Rs 1,000 denominations. No one owned the money but fading trails led to a top UP politician.
Locker Business involved in Money Laundering
According to the Times of India Reports, Investigations in case further revealed that owner had deposited at least Rs 1,000 crore in cash in the central Delhi branches of three leading private banks in the space of nine months and remitted the same to Dubai by producing fake customs invoices of diamond imports.
Diamonds were, however, never actually imported or sold in Surat and Mumbai, as the trader had claimed.
The vault owner’s only job was to provide safe locker services to big industrialists and politicians who had huge cash, launder them to Dubai in the garb of diamond imports and thereafter the beneficiaries invested the money in properties in third country or even brought it back to India as legal currency by way of foreign direct investments (FDIs).
Laundering through the lockers is now becoming a new trend in placing the cash in banking systems. Cobrapost reports in the year 2013, also pointed out that private banks allot lockers for the safekeeping of the illegitimate cash, including special large size lockers to accommodate crores of hard cash.
Modus Operandi
Hawala transactions are illegal. Banks keep records of all legitimate transactions.Operator collects money from a customer.
He then calls up his counterpart in the city where the transfer is to be made.
Cash is handed over to recipient after deducting a commission of 0.5 to 1 per cent. Medium and big money launderers have expanded their business into gold and diamond trading to acquire legitimacy.
They use private lockers to hoard cash.They fake bills to mask their illegal earnings and use banking channels to transmit money to fictitious accounts in India as well as abroad.
