The income tax department has roughly done over 200 raids for new notes since the demonetisation move kicked in. Since last week, according to tax department data, nearly Rs 17.2 crore has been seized in new Rs 2,000 notes.Government officials are of the view that in urban areas, officials of private banks may have played a bigger role in diverting funds and laundering black money for private gains, while public sector bank officials may have been more involved in such activities in rural areas.Bangalore Mirror lists seven ways some unscrupulous people in the banking system may be using to launder new money.Unsuspecting customers queued up outside banks to exchange their old notes post-8/11. Little did they know that the PAN card and other identity details that they submitted to the banks would be misused. Investigators have found out that some bankers misused these details for carrying out illegal transactions without the knowledge of their customers.They would turn away customers who returned to the same bank branch more than once to exchange their old currency citing cash crunch. These details were then be used to facilitate illegal transfer of currency in new denominations.Over 50 per cent of ATMs have gone out of business after 8/11. While some were waiting to be recalibrated for the new notes, the others just sputtered and died. Or so we thought. Investigations by ED, CBI and I-T officials have found that the money meant for most of these ATMs was diverted for black money hoarders; with bank officials joining hands with outsourced security and service agencies who are authorized to replenish ATMs.ATMs send out an automated message after notes are exhausted. In the case of ATMs that were misused, they were shut down after dispensing whatever money they had. The cash that was meant to replenish these ATMs was then diverted.This one is all over the place. At least 10-15 per cent of Jan Dhan accounts in every bank were misused to convert black money. The CBI is hot on the heels of bankers who facilitated this.An account in the Vijayanagar branch, Bengaluru, of a nationalized bank had a balance of Rs 500; after 8/11, it saw a deposit of Rs 2 lakh. When the account holder came to withdraw the amount, he was turned away.Officials found this was one of the most-abused ways of getting money converted from black to white.Get a demand draft made by paying old notes, cancel it after a while and take money in new notes. No questions are asked if the amount is below Rs 49,000.This kind of fraud has emerged mainly out of rural and remote areas where poor and illiterate people's need for change and new notes is exploited.Cashiers issue cash (in new notes) to people coming in with old notes without taking any identity proof; they show it as existing cash in the bank (which basically means that the entire lower denomination notes are sucked out of the system and old notes are returned to the RBI). Bankers charge commission up to 25 per cent for the hassle-free operation. Some fake identities were also created.Refer to point 1. In some cases where identity documents of unsuspecting customers had been submitted, bankers opened accounts in their names and laundered cash.Cash in old notes is deposited in such accounts and withdrawn in new, legal tender. Since the account is left with no money (thus below minimum balance), it becomes defunct.Micro-finance agents, who collect money in smaller denominations (Re 1 to Rs 100) on a daily basis from minor shopkeepers, were also used to launder money by depositing them in accounts of self-help groups. Similarly, some co-operative banks which do not have computerized records, back-dated deposits to launder money (the RBI has since de-authorised them from accepting deposits).The micro-finance agents collect money in new notes from the businessmen. However, they deposit old notes in accounts of SHGs after exchanging the money with black money hoarders.Finance Minister Arun Jaitley said unscrupulous people including some in the banking system were trying to accumulate large amounts of cash unlawfully. Officials in investigative and security agencies are puzzled by the large number of new notes that have been seized in raids during the last one month and feel that these could not have been accumulated without the connivance of bank officials."Clearly, fingers are pointing at banks,” said a banker, who did not wish to be named. "It was bound to happen as you have an arbitrage window,” he said, acknowledging bank officials have been involved. The government appears to be taking note of the issue.".. all agencies are keeping an eye on this. They will investigate this matter and all those who are found indulging in these malpractices will have to pay a very heavy price for what they are doing,” said Jaitley.(with inputs from Chetan R, Bangalore Mirror Bureau & ET Bureau)