TDR scamsters used co-op banks to encash cheques

Co-operative banks played a key role in cashing the cheques received following the sale of Development Right Certificates (DRC) in the Transferable Development Rights (TDR) scam, investigators have learnt.

The scamsters made use of ‘cheque discounters’ - who assisted them in opening fake accounts to cash cheques of various denominations - some of which were in excess of Rs 1.5 crore. Officials suspect that more co-operative banks might have been used for the purpose.

Among the various modes employed by BBMP officials and real-estate agents involved in the scam, was to secure General Power of Attorney (GPA) of landowners.

While some landowners were coaxed into giving GPAs to real-estate agents, other GPAs were secured in the name of fictitious owners.

GPA holders

These agents, using the GPA, then sold the DRC to builders and completed the sale deed. “Subsequently, cheques were issued in the name of landowners (either real or fictitious) which remained in the hands of GPA holders. Co-operative banks were used when these agents wanted to cash these cheques,” Anti-Corruption Bureau (ACB) sources told DH.

For the purpose, real-estate agents approached cheque discounters in co-operative banks. The cheques were encashed by opening fake accounts. “That was one of the reasons for recent searches on Banashankari Mahila Co-operative Bank, where several transactions related to TDR irregularities were allegedly carried out,” according to ACB officials.

The cheque discounter of the bank, identified as Rajesh, helped the accused in the TDR scam to open fake accounts in the name of land-owners without their knowledge. The cheques were then deposited in these accounts and cash was withdrawn by the agents.

Officials have identified a total of 174 such ‘zero-balance accounts’, which was not utilised only for the cheque drop and cash withdrawal purpose.

“They used co-operative banks as these banks are isolated financial enterprises when compared to nationalised banks. In nationalised banks all cash transactions exceeding Rs two lakh are flagged, whereas in co-operative banks such transactions can be hidden from agencies,” sources said.

How cash flowed out

This helped the scamsters to withdraw cash from the cheques issued - each of whom were valued from several lakhs to Rs 1.8 crore.

However, in a recent statement, Banashankari Mahila Co-operative Bank has denied any involvement in the TDR scam.

“Our bank has extended all co-operation to the ACB. All documents requested by the ACB in connection with the (TDR) case has been inspected by officials,” the statement said.