Six Days of ₹48,000 Deposits at a Cooperative Bank
At a cooperative bank branch in Aurangabad, a customer, Farhan, visits every morning for six working days and deposits ₹48,000 in cash into three different savings accounts: his own, his wife's and his brother-in-law's. Each deposit is below ₹50,000, and he refuses to give PAN, saying 'it is below the limit'. The branch's new clerk, Priya, notices that the accounts have seen no such activity before and that Farhan becomes irritated when asked about the source of funds. Priya's senior tells her to 'just process it, he is a known customer' and says suspicious transaction reports are only for amounts above ₹10 lakh. On the sixth day Farhan asks whether he can deposit ₹9,00,000 next week in the same way to 'avoid attention'. The branch has a principal officer at head office.
1. Identify the red flags in Farhan's deposits and explain why this may be structuring.
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Red flags:
- Six consecutive working days of cash deposits, each ₹48,000 - just below the ₹50,000 threshold at which PAN is required for a cash deposit in a day.
- Three accounts (own, wife, brother-in-law) used in rotation, none with prior activity of this kind.
- Refusal to explain the source of funds and irritation at questions.
- A plan to deposit ₹9,00,000 'in the same way' to avoid attention.
This is a classic structuring pattern: splitting cash to stay under reporting and KYC thresholds. It may point to tax evasion, unaccounted business cash or proceeds of crime. The bank does not have to prove the underlying offence; reasoned suspicion is enough to trigger enhanced due diligence and a suspicious transaction report. The brother-in-law's account may also be a mule account, which increases the risk.
2. Correct the senior's statement about STR and CTR, including thresholds and timelines.
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The senior is wrong on both counts.
- CTR: banks report cash transactions above ₹10,00,000 in a month, aggregated per account or customer, to FIU-IND. That is a reporting threshold, not the definition of suspicion.
- STR: there is no minimum amount. A suspicious transaction can be ₹1 or ₹48,000; what matters is the pattern and the banker's reasoned suspicion.
- PAN: under Rule 114B, PAN is required for a cash deposit exceeding ₹50,000 in a day. Repeated deposits below that limit are themselves a red flag.
- Timeline: the STR should be filed with FIU-IND within 7 days of establishing suspicion, through the bank's principal officer or compliance officer.
- Confidentiality: the bank must not tip off the customer. Records must generally be preserved for five years.
'Known customer' is not a defence. KYC status does not remove the duty to monitor transactions.
3. What should Priya do, and what should she not do?
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Priya should:
- Continue to serve the customer normally; do not argue or reveal suspicion.
- Record the dates, amounts, accounts and Farhan's statements; preserve deposit slips and CCTV as per branch policy.
- Escalate in writing to the branch manager and the principal officer or compliance officer, with a clear note of the pattern.
- Ask for source-of-funds documentation and complete or update KYC for all three accounts.
- If the principal officer agrees, file an STR with FIU-IND; the bank may continue the account and monitor it.
She should not:
- tip off Farhan or tell him an STR is being filed;
- close or freeze the accounts on her own;
- accept the senior's instruction to ignore the pattern;
- share the STR with anyone outside the authorised chain.
If the senior pressures her, she should escalate through the compliance or whistleblower channel. The PMLA framework protects good-faith reporting.