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OPERATION RED SPIDER, PART- 2 FEDERAL BANK, CASE 2

FEDERAL BANK, CASE 2

Federal Bank, Case 2, C.M. Duggal, Regional Head, ; R. N. Munjal, Relationship Manager, IDBI-Federal, Moradabad, Uttar Pradesh


cobrapost - April 4, 2013

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Federal Bank, Case 2, C.M. Duggal, Regional Head, ; R. N. Munjal, Relationship Manager, IDBI-Federal, Moradabad, Uttar Pradesh
The Federal Bank, with its joint venture partner IDBI, has a well-oiled system of creating the best possible atmosphere of accommodating black money. Theirs is a clean “no problem” policy that encompasses dummy accounts, cash lockers, demand drafts created to draw in black money, operating accounts that have no name and no identity attached, playing around with PAN, and more
At this Federal Bank branch in the busy district of Moradabad, the Cobrapost journalist introduces himself to the official at the front desk and tells him he wants to discuss some investment for long term. The official, Sanjay, provides basic information. Instruments, such as the insurance policies, are sold by IDBI-Federal, a joint venture between the public sector IDBI and the private Federal Bank.
Our basic requirements are the same: long term, guaranteed returns, no TDS. Sanjay leads us to a rather innocuous-looking R. N. Munjal, relationship manager with IDBI-Federal. We start by stating directly that we have some big amounts to invest in three names. He starts explaining that since this is March, and the month for hectic tax saving activity, these are attractive policies. We quickly push in the vital information that the money with us is in cash and that we intend to convert it into white.
He smiles assuredly: “Koi dikkat nahin (No problem).”
We say we have Rs. 1 crore cash. And if we want to invest Rs. 20 lakh in each name, should we do that over a term, or all in one go? Asks Munjal: “Ek bar hi dena hai (Want to give it at one go).”
We say that we would be interested in annual payment schemes as well.
“Wo bhi hai humare paas (We have that option, too),” says Munjal.
We get down to doing our basic math.
Do we get back the money in cheques, asks our reporter, in white?
Munjal nods in agreement: “Bilkul white ho ke ayega (It will absolutely come back in white).”
Our standard warning is that there must not be any risk involved – we should not receive any kind of Income Tax notices later. We also suggest that if he has already done any investment of Rs. 1 crore, and the process has been safe, then he should do a lesser amount with us.
Munjal suggests: “Jitna bhi aapka amount hai … aap aise kariye, teen logon mein divide karke daal dijiye … koi dikkat nahin (Whatever your amount is, divide it and put it in the name of three individuals … no problem).” And how do we pay you? Do we pay direct cash?
Munjal is considerate to commit himself to our cause: “Direct cash de DD banwa dete … koi dikkat nahin … wo sub humara headache hai … aapka kuch bhi nahin (Give direct cash, will convert it into DD … there is no problem … all of that is our headache, not yours).”
That is great! We would pay whatever the expenses are, says our reporter.
Munjal assures us of the genuineness of the product and of his intentions: “Kal aap se mil loonga … Dilli se immediate boss hain wo bhi aa jayenge … wo aapka poora separate kar denge … koi dilkkat nahin (I will meet you tomorrow … my immediate boss from Delhi will also be here … he will create a separate portfolio for you … no problem at all).”
It was reassuring to hear, time and again, that there would be no problem in this underhand and patently illegal deal that we were discussing. As we found later, koi dikkat nahin (there is no problem) is probably the standard approach in the bank.
We still remind Munjal that safety is our prime concern, because it involves a high-profile minister. Has he handled such deals before?
Munjal displays a bit of hubris with tales of his exploits: “Main keh raha hoon huge … isse pehle main Dilli mein tha (I am telling you [it is] huge …. before this, I was in Delhi).” Clients approached him saying “Mere paas paisa hai … isse kaise karna (I have money … how it should be invested).”
And you invested all their money, our reporter asks.
Replies Munjal: “Bilkul … bilkul (Absolutely).”
Was there any problem?
He claims: “Kuch nahin (Not at all).”
This seems to be the safest method to invest black money, we say.
Munjal reiterates: “Subse safest … government abhi … kuch na kuch loophole chorti hai … agar investigation kar de … bilkul safest hai … tension kuch nahin … paisa aapka … white money hoga … koi TDS nahin (It is the safest … the government leaves some loopholes … in case there is an investigation … no tension … your money will be in white … there will be no TDS).”
We exchange telephone numbers.
At that point, a senior officer calls him. We would meet this officer a while later. We come to know Munjal sits at three branches of the bank – Moradabad, Meerut and Dehradun – travelling from one bank to the other. We ask him if he has had clients like us.
Yes, says Munjal. “Meerut … Dehradun mein bhi kaafi hain … paise log laate hain kehte hain … number do ka paisa hai … ye karwao (In Meerut … many in Dehradun as well … people bring Number two [black] money … ask us to get it done [convert the money into white]).”
And politicians?
Munjal is quite open to count a nephew of a big politician from Uttarakhand among his clients and how the former chief minister has invested in the name of his relative for apparent reason.
We prod more, and he tells us he had offered him the same plan.
How much did the politician’s nephew invest?
Claims Munjal: “Unki baat hai kareeb ek saal pehle ki … unka daala near about ek crore rupaye … aath–nau lakh rupaye barh gaya hoga … aise case to bahut hain Sir (His case is about a year old … I put in near about Rs. 1 crore for him … now it has grown by about Rs. 8–9 lakh … there are many such cases).”
Munjal is eager to provide further information: “Ek toh branch manager ne wahan ka ek case diya tha … uska naam tha Naithani … Dehradun ke (One case was given by the branch manager there … his name was Naithani … from Dehradun).”
Who this Nathani is? A politician, asks our reporter.
No, he is not a politician but a builder: “Politician nahin … builders wagaireh … unka bhi hua tha (Not a politician … a builder … his [investment] was also done).”
We tell him to do the same way and in the same slab as politician’s nephew, as it looks safe, and both are cash transactions.
Munjal tells how he is going to facilitate our investment: “Nahin, nahin … DD apne hisab se banayenge … apna paisa dena … aapki receipt banayenge … wo humara saara kaam hai kaise bhi hai karna (No, no … I will make DDs as per your requirement … you give the money … you will get a receipt … this is what our job is and we have to do it any which way).”
We poke an innocent question: Couldn’t Khanduriji have done it in his own name? Replies Munjal, with a smile: “Woh apne naam se karenge nahin na (He won’t do it in his own name).”
We understand, quite the way we are investing in the minister’s wife’s name. We reiterate, is this method safe?
“Koi dikkat nahin … kaise bhi nahin (No problem … not at all),” reassures Munjal.
Munjal now descends to a conspiratorial tone: “Hapur mein … pehle Mayawatiji thi … unke bhai Anand … jo Anand ke aas paas mein kaam karte … jo Guddu … basically main Hapur se belong karta hoon … unhone mere through investment karwaya … unke saath mera bhai ka kaam bhi chalta (In Hapur … Mayawatiji [former chief minister of Uttar Pradesh] … her brother Anand … my brother Guddu works for him … I basically belong to Hapur … he [Anand] has invested through me … working with him also helps my brother).”
We come to know the investment was done in the Meerut branch, not Hapur, and in the same plan as he has proposed for us.
How much did he invest? We dig more.
Reveals Munjal: “Teen kare the unhone … do mein 20-20 lakh, ek mein unhone kara tha … 35 lakh ke aas paas (He had bought three policies … two for Rs. 20 lakh each … one around Rs. 35 lakh).”
His brother’s real name is Shashi Munjal, he tells us, and he is into the construction business. With so much cash, we say we might as well be interested in properties. There are aplenty, he proffers. But we need people, we say, who we can trust.
Suggests Munjal: “Aap ye pehle karle, fir (Then, you do this [the investment] first).”
We say our objective is to convert the cash into white. Property is the best avenue, Munjal hunches up, and then goes on to tell us of another proud association: “Mein aapko bataoon … jo Virendra Nagpalji (Let me tell you [about] … Virender Nagpal).”
The MP, our reporter hazards a guess. He says Nagpal is very close, like a brother. As our discussion progresses, he explains us a bit about the policy. But we are interested in more important things. Who were the persons he spoke to, we ask him, some time back?
They were J. Joseph, the north zone head, and C. M. Duggal, the regional head, we learn. They are on inspection.
We ask Munjal to arrange a meeting with them. We would invest big amounts, we say.
Meanwhile, he has calculated the returns. For an investment of Rs. 1 crore in five years, the return would be Rs. 1.5 crore.
Would all that be laundered into white money?
Yes, he says: “Saara white (All white).”
About the ‘meeting’ the following day, he is willing to call his boss, Chandrasekhar Sharma, who has 60 branches under him.
We quiz Munjal a bit. We ask if the minister does a deal of Rs. 1000–5000 crore, would it be possible for us to invest in the shares (possibly pledge) of the Federal Bank.
It is possible when Munjal is there to help us: “Share daal sakte … aapka paisa … FD wagaireh … dalwa denge … kuch pata nahin chalega … ki apka paisa hai … wo information bahar nahin (You can put in your money in shares … will put your money in FD etc. … nobody will come to know that it’s your money … that information will not be leaked).”
We seek to meet the big boss to discuss further, bigger investments.
Sanjay comes over and asks if we have understood the policies. Yes, we have, we tell him, and this would be an investment in the name of the minister’s wife. Money is not the problem.
Sanjay asks Munjal: “Payment kaise loge aap (How will you take the payment)?”
Munjal explains: “Woh toh cash hai … DD bana ke … wo ho jayega (It is in cash … will make DDs … it will be done).”
Sanjay goes to fetch the boss we would like to meet. Meanwhile, we ask Munjal if they have lockers.
He nods: “Locker hai (There are lockers).”
So can you give us a big locker? Yes, replies Munjal: “Locker de doonga … koi dikkat nahin (I will give you a locker …. no problem).”
We would put all our money, Rs. 8–10 crore, we tell him, to invest it gradually. “Aapka account hai (Do you have an account)?” asks Munjal.
We don’t have any, we say, but would love to open one. Advises Munjal: “Aaj hi account khol dijiye … 5 lakh se account khulwa dete (Open an account today itself … can open the account with Rs. 5 lakh).”
Munjal is ready to help us count the cash before it is put into the locker by providing us a counting machine, and the locker would be enough to take in all the cash in bills of 500.
Enters C. M. Duggal, Regional Head, Federal Bank. Upon his suggestion, we go into a conference room. Here, our reporter tells him that we have some big funds to invest on behalf of a minister. Munjal too fills him up with some details. “Members kitne hain (How many members are there)?” asks Duggal.
Three, we tell him. So this has no TDS, we ask him.
“Nahin, ye tax-free hai (No, this is tax-free),” Duggal responds.
We stress the point. Would everything be in white when we get it back? Duggal nods in assent.
He first suggests: “Account khol dena … account se toh transfer ho jayega (Open accounts … it will be transferred from the accounts).” Then, he realises the mistake and corrects it: “Woh to 50,000 se jyada nahin (It can’t be more than Rs. 50,000).”
But accounts are a basic thing. Duggal says: “Baaki aap savings account wagaireh kholna chahe na … documents wagaireh usmein ye hai ki nau lakh rupaye ka cash aap payment kar sakte hain … at a time [He looks at Sanjay] … usmein aap three–four accounts you can open (In case you want to open savings accounts or so … with documents and the rest … you can make cash payment of up to Rs 9 lakh at a time … [he looks at Sanjay] … you can open three–four such accounts).”
Then, turning to our reporter, he reveals a huge secret: “Teen-chaar account aap kholte hain na … that is between you and me only (Open three–four accounts … that is between you and me only … in that normally what we do is) … usmein normally what we do is … I’ll tell you … some clients are here … that if you don’t want any passbook or cheque book and all that, you need not take it … when you come here you can withdraw and … some people are very particular … hum koi bhi paper nahin rakhenge … idhar aap manager ke paas aoge, account number … aapka dijiye aur kijiye whatever you want to do (we will not keep any papers with us … here, you will come to the manager, state your account number and do whatever you want to do).”
Having taken in the sheer boldness of the ‘paperless’ idea, we explain that the minister is expecting more money, Rs. 7–8 crore, in March from a deal in Greater Noida and we would want to convert all that into white. Meanwhile, we would want to keep that cash in a locker and do the investment slowly, after discussing it with our CA.
Duggal nods in agreement to say: “Waise aapko Noida mein karna hai toh kar dijiye … koi dikkat nahin (If you want to do it in Noida, then go ahead … not a problem) … as far as I am concerned I am in Noida only.”
Sure, that would be easier, transporting all that cash by road. Do you have any branch in Greater Noida?
No, he says, but: “Humara …. Noida mein hai na branch … udhar aap kar sakte ho [looking at Sanjay] … cash aap lekar aajao … koi dikkat nahin hai … woh koi Chaddaji …kuch lag jaate hain na (We have a branch in Noida … you can do it there … [looking at Sanjay] … bring along your cash … there is no problem … there is one Chadda … there would be some charges).”
He is talking about giving commission to one Mr Chadda. We are prompt to say we would pay upfront. Duggal is ready to provide us lockers in Noida to keep all our cash there.
But he suggests us to open accounts with this Moradabad branch: “Idhar toh aap accounts khulwa hi do na … accounts khulwa lo, koi dikkat nahin hai … savings ke andar … aap dus se neeche neeche … wo cash mein karna (Open accounts here anyway … not a problem … invest below Rs. 10 lakh in savings [account] … do it in cash).”
Fine, we say. We would put Rs. 5 lakh in each account.
He has more suggestions: “Aur jab nikalna hoga na usi hisab se karna (And when you need to withdraw do it in the same manner).” Sanjay acknowledges: “Dus se kum nikalna … nau–nau, aath lakh (Withdraw less than Rs. 10 lakh … [like] 9, 9, 8 lakh).”
Duggal seeks on the phone some more expert advice: “Yaar … ek cheez batao humko … inka insurance ka … maximum cash mein kitna hum kar sakte … PAN card? [looks at the reporter] … PAN card nahin … agar savings account se cheque de ke transfer karwa dein toh (Tell me something … how much maximum cash we can accept in insurance policy … PAN card [looks at the reporter] … no PAN card … what if we transfer through cheques from the savings account).”
He must have been advised on the wisdom of giving PAN card copy, so asks the reporter: “PAN card ki copy denge (Will you give a copy of the PAN Card)?”
What if this information is disclosed? We raise our concern.
“Nahin, nahin (No, no),” he assures us and gets back on the phone: “Ji disclose … as far as we are concerned we are not disclosing anything na … that paper KYC document we are keeping it for ourselves. Is it not?”
He then seeks to know from the official on the other end of the line what the exemption limit is for medical check-up. It depends on age of the client, and we come to know that we can put Rs. 20 lakh in each policy, as our age is 30 years.
Turning to us Duggal again asks: “Minor nahin hai (No minors)?”
Yes, we have an 11-year-old boy.
Duggal returns to the phone: “Uska toh zyada amount kar sakte hain na … usko toh medical ki zaroorat bhi nahin hai na … toh aapke … inko maloom hai na … jo saari cheez hai … ye lo baat kar lo (So, we can deposit a bigger amount for him … he won’t even require a medical check-up … he [Munjal] knows all these things … here he is … talk to him).”
He hands over the phone to Munjal and he assures the person on the other side: “Maine kaha wo … koi dikat nahin hai (I said that … no problem).”
Meanwhile, turning to our reporter, Duggal tells him that he sits at the Sector 22 Noida office of his bank and if he happens to be near about they can meet there. We also come to know that Moradabad is his regional headquarters and he heads three states of Uttar Pradesh, Madhya Pradesh and Chhattisgarh, and his boss Jiju Joseph is in-charge of the entire North region.
Duggal talks to Munjal: “Toh aap guide kar dena … koi bhi agar problem aa rahi ho toh main … Sukhwinder [the MD] se baat karni hai to mai baat kar loonga … koi dikkat nahin aani chahiye (So, you guide him … if there is any problem, then I … if need be I shall talk to Sukhwinder [the MD] … there should be no problem).”
Keeping your superiors informed of such deals is always good.
Turning to our reporter with a smile, Duggal says: “And any time you … aap ka koi problem ho [if you have a problem] … give me a call.
Our reporter quickly exchanges phone number with Duggal.
We reiterate our need of lockers. Duggal assures us: “Koi dikkat nahin hai … aap contact kar lena (No problem … you may contact me).”
We ask if there are any more such policies available.
Suggesting us to invest also in mutual funds of fixed income kind, Duggal lowers his voice to say something more: “Best deta hoon aapko … aap gold purchase karke rakho … gold … aap ne liya, locker mein daal diya (I will give you the best [advice] … purchase gold … you buy gold … put it in the locker).”
And we would get the 24 carat gold in physical form with 99.99 per cent purity. But we could sell it on the market immediately. The second option is not available with the branch yet, and it will be on the table with a year.
So then, we can sell it, asks the reporter, and the money would be white.

“Haan, haan (Yes, yes),” he responds. We could sell the gold to the jewellers or sell it back to the banker, and could get the payment by cheques. We could buy gold in the form of biscuits or coins in any denomination ranging from 2 gm to 100 gm.
We decide to meet again at 4 pm the same day, to take the deal forward, and make the payment the day after. Formalities would be completed by Munjal.
However, Duggal’s bag of secrets isn’t empty: “Udhar bhi [referring to his Noida branch] aap do chaar account khulwa dijiye … normally kya hote … jaise PAN card … boliye mera PAN card hai AZPD … AZPD me koi full stop comma bhi aaye to wo thoda sa alag cheez ho jata hai (Open a few accounts there also … normally what happens … for example, PAN card … say my PAN card is AZPD … if there is even a full stop or comma in that, it becomes a bit different).” Thus, a small clerical ‘mistake’ could create a new, untraceable identity for us.
Before leaving, we put across another vital question.
The minister’s wife keeps going to England. Is it possible to send to England Rs. 40 lakh in March and in April from the cash we would keep in the locker?
Help is at hand as Duggal says: “Haan … wo alag account se karna padega … wo toh ek pakka account hi kholna (Yes … that will have done through some other account) … open a proper account) … any time you contact me … now your number is saved … give us some business in March.”
After thinking for a moment, Duggal seeks to know who the minister is: “Kaun se department mein hai (Which department is he in)?”
Why hurry when you are going to meet the minister anyway. It would be premature to disclose his identity. The minister would come tomorrow. The work at hand would be handled by the minister’s wife and our reporter.
With that, we shake hands and part.

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Tags : Federal Bank Case 2 C.M. Duggal Regional Head ; R. N. Munjal Relationship Manager IDBI-Federal Moradabad Uttar Pradesh


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