A book about how demonetisation data can be used to topple governments

Team L&M

A financial thriller that dives deep into money laundering in India, particularly the methods used by corrupt businessmen and politicians to funnel their ill-gotten gains into the banking system, post the surprise announcement of demonetisation, Riding the De(Mon) (Leadstart Publishing) is written by Chartered & Cost accountant Murali Raghavan. Following is an extract from the book.

Chapter: 5 Page 45-47

Chaturvedi was aware that banks used suspense accounts when they needed to reconcile their books. If a remittance is received and the bank does not have clarity on who made the remittance, the amount is credited to the suspense account until they get that clarification. Similarly, if there is a debit to the bank’s account that is held overseas or with other banks, the suspense account is used as an interim measure until the bank finds the reason for the debit. To make matters worse, there were several debits and credits done to the same accounts on the same day from several other accounts. It was a well-crafted tangle, and then a large part of it had been lowered into a black hole. The trickster in Chaturvedi appreciated the simplicity of it. He looked at the papers that held the many secrets of his clients, contemplatively. These papers were hidden well in the jumble of his cupboard, and easily ‘lost’ when they had to be. It was the same trick that the fraudster had employed.

At Bharat Bank, like in every bank, transactions were archived digitally. The archives acted as roads that linked the beginning and end of a money transfer, the debits and the credits. The Bank’s case stated that Vikram was the officer in charge of Bharat Bank’s archives during the month when these discrepancies showed up. As a result, the closing balance of the previous day did not match with the opening balance of the same account the next day and the bank could not trace the transaction that happened between these two contiguous records. The bank filed a case against Vikram but he denied any involvement.

Dev’s dossier said that Vikram had reached out to his seniors and colleagues to vouch for him. One of his colleagues told Dev that they wanted to initially, but what if Vikram had actually done it? Did they really want to get involved? All his friends were mostly at entry level positions and could not afford to take any risk with their careers. In his defence, Vikram had stated that he had noticed security lapses in the system. He noticed suspicious transactions and the tampering of records and had raised his concerns with his seniors. Since the bank was afraid that Vikram would contact the Reserve Bank of India, the Bank had drummed up these charges against Vikram to divert attention from the bank’s poor controls on money laundering activities.

Dev had added that Vikram’s laptop, seized by the police, showed no suspicious transactions at all. Usually, Chaturvedi believed Dev’s judgements without a question. This time, he wasn’t so sure. He had learnt, over the years, that the truth was never obvious. “I saw the video recordings of Vikram’s interviews. He was nervous but never once caved.”

Chaturvedi had been surprised by the shadow of respect in Dev’s voice. During Dev’s investigations, there was only one person who raised some doubts – an ex-employee Shyamala. The other employees said she had a crush on Vikram. Shyamala told Dev that Vikram had hired her and she had worked on his team for more than three years. She noticed a big change in Vikram when his father died. He had also told her that the Bank was helping money launderers and therefore she should quit and join another bank. “That girl was in awe of Vikram,” Dev had said. “She said he was the most intelligent people she had worked for, and his skills were far superior to any of those of his seniors.”

There was a time when someone hacked into the bank’s credit card database. There was panic all around. It was crucial to act fast because the bank could lose crores of rupees within hours, and it could not possibly ask its customers to bear the loss. Senior managers were desperately trying to contact their IT vendors, when one of them asked Vikram if he could help. He had a reputation as a technology whiz but other managers thought asking him to trace something this big was too much to expect of someone with his nascent experience. Vikram had promised to fix it before the IT vendor got back with a quote, and they all thought it was an empty boast.

“But he did it,” Shyamala had said, wide-eyed. “Even the vendor was shocked. I think they offered him a job. Maybe they were joking.” Shyamala sounded like she did not believe that at all.

Dev could not figure out which side she was on. Finally, he got it. Her opinion was, if Vikram had done it, the Bank would not be able

to find the funds. He was too clever. That turned out to be true as the bank claimed losses to the tune of INR 10 Crores from the insurance company. The insurance company was contesting the claim since the Bank had not been able to provide evidence of any actual fraud committed by the employee, Vikram.