I-T circular puts Rajkot co-op banks on back foot

Rajkot, July 28 | Updated: Jul 29 2006, 04:41am hrs
The I-T departments plan of tracking down money laundering has met with resistance from co-operative banks in Rajkot, a major city in Gujarat. The department had plans to keep tabs on all the depositors having fixed deposits of more than Rs 2 lakh in the co-operative banks.

The I-T department recently issued a circular to all co-operatives, asking them to furnish details of all depositors who have fixed deposits of more than Rs 2 lakh. According to this circular, all co-operative banks in the state will have to provide details of its depositors to the I-T department on a quarterly basis.

However, this move has not gone down well with co-operatives in Gujarat, especially in Rajkot. The co-operative bankers here feel that there is hardly any co-operative bank that has depositors having fixed deposit of more than Rs 2 lakh. Industry sources said the move would increase work-load of co-operative banks.

Bankers also believe, is not possible to track such depositors because there are 250 co-operative banks in Rajkot alone. How is the IT department going to scrutinise all the details questioned one of the bankers.

Co-operatives have been brought under tax net this year and now the Centre is trying to bring small depositors under its scanner.