(This story originally appeared in on Jan 17, 2018)

NEW DELHI: On Saturday, the income tax (I-T) department made another big haul, of Rs 21 crore, from private lockers operated from a single room in Delhi’s tony South Extension, taking the total seizure of cash and bullion to over Rs 85 crore in the past few weeks — a potential push for the government to bring private vaults under the regulatory regime to catch hold of black money hoarders, who are increasingly avoiding the regular banking channels to stash their unaccounted wealth.Over 100 lockers were rented out at the South Extension private vault for an annual fee of over Rs 1.5 lakh per locker. In banks, lockers are available for less than Rs 1,000 per annum. The cash and bullion worth Rs 85 crore seized came from just about 41 lockers in the vault.With higher surveillance on banks, top industrialists and businessmen with unaccounted for cash and bullion are avoiding locker services and moving to unregulated private vaults for the safekeeping of their ‘black money’. Some of the cash recoveries were traced to gutka manufacturers and liquor dealers. The probe against the South Ex private vault revealed that all the deposits were made post demonetisation in high value currency notes. At least Rs 40 crore in cash was recovered, mostly in Rs 2,000 notes, from this private vault.In a raid at a private vault at Connaught Place (CP) a few years ago, by the time Enforcement Directorate sleuths seized Rs 10 crore of unaccounted for cash, the owner of the lockers had already deposited Rs 1,000 crore in cash at three branches of three leading private banks and sent it abroad as ‘import remittances’. Investigation in the ED case had revealed that the unaccounted for money belonged to several top politicians and industrialists.A top I-T official told TOI they had gathered intelligence about hundreds of such private locker services in the national capital alone where no know-your-customer ( KYC ) guidelines were followed. Such services are also available in other major metro cities.The I-T department has approached the finance ministry seeking to bring these private locker services under a regulatory regime to make them compliant to KYC norms followed by banks. At present there is no reporting mechanism or any accountability on maintaining a locker with a private vault.“There appears little requirement for them to adhere to KYC norms prescribed by the RBI. Further, there is no reporting of such lockers to any authority… there are no CCTV cameras in such lockers which is mandatory for lockers provided by banks,” a senior I-T officer said. Many of these lockers have been found to be benami, in the name of employees of businessmen and leading builders.An investigation into the South Extension seizures revealed the lockers were owned by drivers and peons of top businessmen, builders and industrialists. “The owners’ address and profile didn’t match, many of them were benami or belonging to those who never filed their I-T returns,” the officer said. The department is yet to open several other lockers under surveillance in many cities.The modus operandi of the CP vault was to collect cash from clients that included industrialists and politicians, issue bogus diamonds trading bills, and remit the money to companies in Dubai, and from there to the accounts of beneficiaries in a third country.