At least seven more banks may soon come under the Enforcement Directorate (ED) scanner in connection with its investigation in the alleged Rs 6,100 crore Bank of Baroda illegal foreign exchange transfer case.
The agency, which has already put nine banks under investigation after arrest of two alleged hawala dealers, has now identified seven more suspected modules which used different banks to illegally route money abroad.
ED sources said these modules are run by seven different hawala dealers who have been using banking channels to send money belonging to various unscrupulous exporters and traders abroad for several years.
“After the first two arrests, all of them have taken to their heels. We are looking for them. Once they are arrested many more banks could come under investigation. Each module is expected to have used at least one bank for their illegal transactions,” an ED officer said.
Last month, following a case registered by the Central Bureau of Investigation (CBI) against officials of BoB and some exporters, ED cracked down on the network.
It busted two modules that exposed eight top banks through which money was allegedly being illegally routed abroad.
“The investigation net is getting wider by the day. We already have more than what we expected on our plate. Hawala through banking channels seems to have infected the entire banking sector,” said another ED officer.
The banks facing ED investigations currently include,
BoB, Oriental Bank of Commerce, HDFC Bank, ICICI Bank, Yes Bank, Dhanalaxmi Bank, DCB Bank, Axis Bank and Kotak Mahindra Bank.
The CBI and ED have already arrested three officials employed with BoB and HDFC Bank. More arrests may follow after the investigation expands, sources said. Investigations have revealed that various modules, comprising of exporters, middlemen and certain bank employees, had been allegedly running this forex racket for close to 10 years.
The agencies have found that unscrupulous traders, some of who have faced drug trafficking charges in the past, used banking channels to send money abroad in lieu of either inflated exports or non-existent imports. Most of the money was suspected to be sent to Hong Kong and Dubai while exports were shown as having been shipped to Afghanistan and China.
All transactions were deliberately kept below $1 lakh so as not to arouse suspicion of the authorities.
The CVC has now asked banks to keep an eye on and report such transactions as well.