Two more officials of the Reserve Bank of India (RBI) were arrested by the Central Bureau of Investigation (CBI) on Saturday for their alleged role in currency conversion fraud cases.
The arrests, coming in less than a week's time, have caused much discomfort for the central bank, which had maintained that the one arrested earlier was a junior-level functionary. The fresh arrests put into question the role of its officials involved in currency exchange process, initiated following Prime Minister Narendra Modi's note ban announcement on November 8.
The two accused—identified as Sadananda Naika and AK Kavin—are posted as Senior Special Assistant and Special Assistant RBI's cash department in Bengaluru. The first to be arrested, K Michael, was a Senior Special Assistant in the Issue Department of RBI's regional office.
Elaborating on the arrests, a CBI official said the accused fraudulently gave away new currency notes to unknown RBI officials and others in replacement of demonetized notes to the tune of Rs 1.99 crore, in violation of the currency exchange limits imposed by the RBI.
"It is alleged that both the accused and other unknown officials of RBI, Bengaluru entered in criminal conspiracy with unknown others," said the official. Among several sections of the Prevention of Corruption Act and the Indian Penal Code, the duo was slapped with charges of criminal conspiracy, fraud, criminal breach of trust and so on.
The arrests come after the RBI, earlier this week, claimed that "elaborate instructions" had been given to bank managements to keep in check untoward transactions.
It was the arrest of Parashivamurthy—a cashier of the State Bank of Mysore in a branch in Chamarajnagar district for allegedly exchanging demonetized notes to the tune of Rs 1.51 crore with Rs 100 notes—that led the agency to Michael. Further probe revealed the role of more officials.
In another incident, CBI registered case against KL Bhoyar, Assistant Commercial Manager, Central Railway, CST Mumbai. The agency said Bhoyar allegedly exchanged demonetized currency worth Rs 8.22 lakh (approx) with new Rs 2,000 notes and legal tender of Rs 100 notes at booking counters at CST, Mumbai and Kalyan in Thane district. The agency also recovered Rs 2.2 lakh cash—in denomination of Rs 100—in subsequent raids.
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