Last week, Ketan Parekh is understood to have told the apex court that he can no longer make payments towards the money owed by him to Madhavpura Mercantile Cooperative Bank (MCCB).

The discredited stock trader had been granted bail on the condition that he would repay the money owed to the bank in monthly instalments. It may be recalled that Ketan Parekh had siphoned off over Rs 880 crore from the bank, leading to its collapse.

While Parekh has taken full advantage of the monster bull run in the last three years to accelerate his repayment, the investigation agencies are pretending that he is bringing back money he had salted away in overseas accounts.

What is surprising is the cooperation of the Income Tax (IT) Department in facilitating these repayments. It may be recalled, that in 1992, the IT Department has claimed tax dues running into thousands of crore rupees from Harshad Mehta, his brother Ashwin, Bhupen Dalal and others. This had prevented any settlement or repayment because IT staked first right to all recoveries. This time, however, the IT has not made such a claim. A top IT official told this writer that "it was decided that he must be allowed to repay dues to Madhavpura since it involves payments to small depositors". He would not say who had made this decision.

Asked if the tax authorities had attempted to trace back Ketan's payments to their source, I was told that money was paid through a maze of entities with a cash deposit in a bank account as the end point. In that case, this should be of personal interest to the Finance Minister who has repeatedly talked of tracking all cash transactions of over Rs 10,000 through the banking system.

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