Eight Cash Deposits That Stop Just Short of ₹10 Lakh

File a Suspicious Transaction Report. The pattern is structuring.

The reasoning, feature by feature: eight cash deposits in eight weeks, each falling between ₹9.1 lakh and ₹9.9 lakh, none reaching ₹10 lakh; an aggregate of ₹76.3 lakh against a declared annual turnover of ₹48 lakh, so the two months alone exceed the declared year; a dormant account reactivated on the first deposit; third-party depositors, one of them not a signatory; and near-total onward RTGS transfer within 24 hours, which is layering rather than trading.

No single feature is conclusive. The clustering is. ₹10 lakh is the monthly cash threshold at which a Cash Transaction Report is generated. Eight deposits that each miss it by ₹10,000 to ₹90,000, from a business whose declared turnover makes them implausible, is consistent with a deliberate attempt to stay under the line - and structuring is a suspicious pattern whether or not the underlying trade turns out to be genuine.

The two reports are not alternatives.

• CTR is threshold-based and largely automatic: it is generated from the system when cash in an account crosses the prescribed monthly limit, and is filed by the bank's reporting team by the prescribed date in the following month.
• STR is judgement-based and has no monetary floor. Suspicion, not amount, is the trigger. It is filed by the bank's Principal Officer with FIU-IND, and the branch's duty is to escalate with a written note within the internal timeline so that the filing happens within seven days of the suspicion being recorded.

Filing a CTR does not discharge the STR duty. Treating them as substitutes is the single most common failure in branch-level AML.

Do not tip off the customer. The proprietor must not be told that a report is being filed, or asked questions framed around suspicion. Ask for invoices, GST returns and the contract through an ordinary financial-verification letter - the same letter any branch might send any customer. Tipping off defeats the investigation and is itself a breach of the confidentiality obligations that attach to reporting.

Do not close the account or freeze it to tidy the book. Closing removes the very visibility that a report creates, and it can leave the customer free to repeat the pattern at another branch with a clean-looking record. Continue ordinary operations unless there is a specific lawful basis to restrict them, and monitor.

Do not refuse the next deposit on suspicion alone. A bank that blocks a legitimate business's cash flow on a hunch faces a damages claim. The correct route is report, monitor, and restrict only on a proper basis.

Do not leave the KYC file as it is. The customer must now be risk-rated high, and enhanced due diligence applies: source of funds, nature of business, and refresher of the KYC. Last updated in 2019, the file is already overdue for a high-risk customer, whose periodic updation cycle is two years.

Do not rely on the proprietor's explanation without testing it. Accept the explanation into the record with the documents that support or fail to support it. The judgement is not whether the story is plausible; it is whether the evidence behind it is.

The escalation note should carry:

• the eight dates, amounts and modes, and the aggregate, presented as a table rather than a narrative;
• the identity of each depositor and which of them is not a signatory;
• the dormant period and the date of reactivation;
• the onward RTGS pattern, including the beneficiary firm's name and account;
• the declared turnover against deposits received, with both figures sourced;
• the KYC status (2019, overdue for a high-risk customer) and the risk re-rating applied;
• the customer's explanation, the documents asked for, the date of the request, and what was or was not produced;
• the date on which suspicion was first recorded - because the seven-day filing clock runs from that date, not from month-end;
• the officer's signature and the Principal Officer's acknowledgement.

The note goes to the Principal Officer in a confidential file, not into the customer's ordinary file, and is not discussed at the counter.

Afterwards: records relating to the transaction and to the verification are retained for the statutory period (five years from the date of the transaction), and the account stays under enhanced monitoring. If no further deposits follow and the documents requested arrive and reconcile, the branch may record that the transaction has been satisfactorily explained - but the STR already filed is not withdrawn; the record shows reasoning, not a verdict.