National Bank for Agriculture and Rural Development (NABARD) has stated that it has found no money laundering in co-operative banks, Nabard's Chairman Prakash Bakshi has stated. His statement comes amid
allegations of co-operative banks being used as conduits for money laundering. NABARD jointly regulates co-operative sector banks who lend loans.
Every year Nabard do an inspection and it has not found anything such as money laundering, he added. A probe launched by Reserve Bank of India following allegations of non-compliance with anti-money laundering measures and know your customer (KYC) norms by top private banks has reportedly found that cooperative banks are used as conduits. Not having the entire bouquet of service offerings, the cooperative banks tie-up with scheduled commercial banks to expand their reach.
Co-operative banks can accept cash under Rs 50,000 from customers (the limit at which reporting to tax authorities sets in). They usually earn commission from larger banks for providing services.