Page 10 - Banking Finance January 2024

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48 fraudulent companies It was discovered that one of the is out of proportion to real income has
people who had been arrested, who resulted from this.
that were receiving also happened to be the owner of M/ The action was taken in response to

fraudulent ITC worth over s M.K. Traders, had received fake ITC worries expressed by the RBI over un-
Rs. 199 crore busted totaling more than Rs 5 crore, most of secured loans, which led to a 25 per-
which had been transferred to other
According to the finance ministry, centage point rise in risk weights for
related linkages. credit cards, unsecured personal loans,
three people have been arrested after
a ring of 48 fictitious entities that had The other two people who were ar- and lending to NBFCs last week.
rested were crucial to the syndicate's
been obtaining illegal input tax credit According to a different person who is
(ITC) totaling over Rs 199 crore was operation and were helping and en- aware of the representation, banks
discovered by GST authorities. couraging it. last month requested online return
The coordinated 'Operation Clean During the operation, evidence was verification through NSDL or direct in-
Sweep' against bogus billers was found that included stamps from 55 teraction with the Income Tax Depart-
launched by the Central Goods and different companies, multiple SIM ment.
Services Tax (CGST) Delhi East cards, papers such as Aadhaar cards,
Commissionerate. The operation was and electricity invoices that belonged Quicker income tax re-
based on human intelligence that was to a third party.
obtained and evolved through data funds: CII survey
mining and data analysis. Lenders want ITR access to According to a CII survey, 89% of
48 false or fictitious businesses-either confirm borrower informa- people and 88% of businesses believe
paper businesses or nonexistent-that that the amount of time they have to
dealt in fake invoices were found dur- tion wait to receive their income tax return
ing the operation's initial wave. The Banks have requested access to income has decreased during the last five
Chief Metropolitan Magistrate Court, tax returns from the government years, from 2018 to 2023.
Patiala House, arrested and placed through the National Securities Deposi- According to the CII Income Tax Re-
three people under judicial custody tory (NSDL) in order to verify state- fund Survey, which was given to Fi-
detention for a period of two weeks. ments made on loan applications. nance Minister Nirmala Sitharaman,
The ministry stated that more re- Lenders recount several instances in 22.4% of respondents at the firm level
search is being done after identifying which applicants have falsified or exag- and 75.5% of individuals did not pay
additional syndicate members and the gerated their income information on TDS above and beyond their antici-
ring commanders. false pretences. Fraud or finance that pated tax burden.

BANKING FINANCE | JANUARY | 2024 | 9