The Jammu and Kashmir Bank (J&K Bank), already facing acorruption investigation, could be in for more trouble as the National InvestigationAgency (NIA) may probe the bank’s alleged role in an ongoing terror-fundingcase.According to a source in the home ministry, the agency has flagged severaldiscrepancies in the functioning of the bank, hinting at suspected “dubiousactivities” that may be linked to terror financing.During the course ofinvestigation into a terror-funding case of 2017 that saw the arrest of JKLFleader Yasin Malik, Dukhtaran-e-Millat leader Asiya Andrabi, separatist leaderShabir Shah of the JKDFP and Masrat Alam of Muslim League among others, the NIAis said to have found that all the accused held accounts in the bank but didnot have any valid documents for them.

“During questioning of the accused, when the NIA soughttheir account numbers, and when they went back to check transactions madethrough those accounts, they realised that most of those accounts were eitheropened fraudulently or without proper procedure,” said another source in theministry.The NIA has allegedly found that the bank did not follow any KYC (KnowYour Customer) norms, the accounts were not linked to respective PANs(Permanent Account Numbers), and there were no phone numbers or proper addressproofs in the documents used to open these accounts.Despite repeated calls andtexts to the J&K Bank spokesperson, there was no response. This copy willbe updated if and when the bank responds.The NIA action will spell more troublefor the bank after the Anti-Corruption Bureau (ACB) of Jammu & KashmirPolice earlier last month claimed to uncover a racket in which loans to thetune of Rs 1,000 crore were diverted. The bank’s chairman, Parvez Ahmed, wasdismissed following this.With the ACB sharing details of the alleged scandal,the CBI and the Enforcement Directorate (ED) are to be roped in as the casewill require a forensic audit by a specialised agency.While CBI has aspecialised unit for bank fraud cases that investigates high-value cases andcorruption, the ED will focus on money laundering.The NIA has also conveyed tothe home ministry that unsecured loans were given by the bank without anycollateral, ThePrint has learnt.

In addition, the second source quoted above said, hugeamounts of money were disbursed in the name of CSR (Corporate SocialResponsibility) activities without maintaining proper accounts.

“There is no check on the loan given,” the source said.“Money is pouring in and is being withdrawn without any records, without anyidentification of the source.”

According to yet another source, when NIA gave the bank afew account numbers and asked for their transaction details, the bank did nothave any data available. “The bank was unable to produce any data or details ofthose accounts, not even the phone numbers against those accounts,” said thesource.The NIA probe has also revealed that credit cards are being used as cashcards and that data was being maintained manually, ThePrint has learnt. “Therewere a lot of cash deposits that were done in those accounts, but the data ofthe source from where the money came was unavailable. Even the deposit slipsthat are used to put money in accounts were not available with the bank,” thethird source said. “It is bizarre that a bank is functioning after flouting somany norms. It is like a personalised bank being used for dubious activities.”

The source said the bank had not even shared that annualinformation reports with FIU (financial intelligence unit). “No data was beingshared with FIU.”

Banks are required to maintain and preserve information inrespect of transactions with its client in hard and soft copies and reportinformation of all suspicious transactions to the director, financialintelligence unit.