KOCHI: Even as PM Narendra Modi is pushing for reforms in the economic sector, sales proceeds ofair tickets to the tune of $16 billion a week are being routed through Deutsche Bank. This happens at a time when nationalised banks are eyeing a big slice of the bourgeoning aviation market pie.
A memorandum forwarded by Public Accounts Committee (PAC) chairman K V Thomas to the RBI says nationalised banks are mute witnesses to the big volume of aviation business being handled by the foreign bank.
To an RTI query about the average weekly turnover of Deutsche Bank, the RBI said it did not have any information. The percentage of handling charges levied by the foreign bank for processing the colossal figure is also not known.
Travel agents had been making cheque payments to International Air Transport Association (IATA) till 2016. The enormity of the transaction with Deutsche Bank came to light after agents were instructed to make direct payments to the bank last year.
While the Finance Ministry and RBI are determined to bring back ‘black money’ stashed in overseas tax havens, authorities are allowing a foreign bank to poach the $16 billion weekly proceeds of the aviation industry. “I have forwarded the memorandum to RBI Governor Urjit Patel and he has promised to look into the matter seriously,” Thomas told Express.
“He said it assumes great significance considering the country is set to become the third largest aviation market within a few years with its current size estimated to run into trillions of rupees.”
The memorandum submitted by the IATA Agents Association of India says tickets are being sold through accredited travel agents. IATA collects the money every week using the Bank Settlement Plan and routes it through Deutsche Bank AG offices.
The IATA clearing house apportions the amount based on sales reports. Even AI and Jet Airways receive payments from IATA. The proceeds from ticket sales go to foreign bank before reaching IATA.
Other charges like user development fee and airport, governmental taxes (including service and sales levies) and fuel surcharges are part of this transaction. The fuel surcharge collected under IATA Tax code ‘YQ’ and ‘YR’ forms the major chunk of tariff. But it goes directly to the airline’s kitty without taxation, says association president Biji Eapen.
The IATA Agents Association of India has written to the Union Finance Minister and Civil Aviation Minister seeking steps to ensure sales proceeds of tickets are routed through nationalised banks.