Bengaluru, Dec 14: The Central Bureau of Investigation (CBI) has arrested K Michael, a senior special assistant in the Issue Department of Reserve Bank of India (RBI), for helping one of his friends convert up to Rs 6 lakh worth of demonetised notes into new currency.

An official said SBM's Kollegal branch has a currency chest and it supplies notes to nearby branches. On November 8, Michael had been to Kollegal to refill currency when the demonetisation was announced at night. Michael, the CBI officials said, helped one of his friends to exchange demonetised notes for Rs 100 bills at the bank without following the documentation stipulated.
The CBI earlier had arrested Parashiva Murthy and a private person for helping many individuals exchange demonetised notes.
Murthy is the custodian of the currency chest at Kollegal branch and had entered into a conspiracy with a few other bank officials to exchange the demonetised notes.
Murthy had disbursed Rs 1.51 crore worth of new notes between November 11 and 13 without obtaining application for exchange with proof of ID or approval of the branch head. The accused had allowed the exchange of old notes with Rs 100 bills to some select individuals in violation of the rules and without the approval of the branch head.
The demonetised notes received thereafter were deposited into the currency chest of the branch along with the other old cash disguising it as genuinely exchanged currency.
RBI clarification
RBI deputy governor S S Mundra clarified that it was a junior functionary who was recorded to be present at a bank branch where some suspected transaction was happening. “We have instituted an investigation and due action would be taken once the details are ascertained. The RBI is coordinating and collaborating with various investigative agencies whenever they flag details of the suspicious transactions,'' he said.
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