State-owned Union Bank on Tuesday said it has followed all norms while accepting the Rs 982-crore deposits from an alleged frontman of Madhu Koda, former Chief Minister of Jharkhand who is facing charges of money laundering.

The bank conducted an additional audit after the scam broke out and did not find any discrepancy in the transaction, a senior bank official told PTI here today.

"We did another round of audit and confirmed that the transaction was conducted after following all required norms. We had informed all concerned authorities while accepting this amount," the official said.

However, in view of recent developments, the bank would tighten its Know Your Customer norms while handling big cash transactions, the official said.

Income-Tax Department sleuths had yesterday questioned Union Bank Chairman and Managing Director, M V Nair, here over the matter.

During the questioning here lasting more than three hours, the taxmen are understood to have asked Nair whether the bank followed all rules while accepting such a huge amount.

Nair said the bank told the I-T Department that it had followed all KYC (Know Your Customer) and Anti-Money Laundering norms as per Reserve Bank directives.

"Both the accounts (of Balaji Bullion) were registered as bullion accounts and transactions in bullion are primarily in large volumes of cash," Nair had said.

The bank is now in talks with the government and may come out with a clarification in the next few days, the bank said.

"We are making our part clear to all those asking for the information," the bank said.

According to Reserve Bank guidelines, banks are supposed to ask for specific details if more than Rs 50,000 is deposited in an account.

Manoj Punamia, the alleged frontman of Koda, had deposited more than Rs 982 crore in the Union Bank account of Mumbai-based Balaji Bullion Bazar in 2008 and 2009 at its Zaveri Bazaar branch.

"The bank releases gold to the customer only after receiving cash or draft. If the customer is approaching the bank with cash, there is no reason why the bank should deny the transaction to the client," the official said.

However, the bank did not have any connection with Koda nor was he a customer of the bank, the official said.

"Once the transaction is done, generally there is no need for the bank to enquire about the background of the client and what is he involved in," the official said.

Koda, the first Independent MLA to become a Chief Minister, is at the centre of a multi-crore hawala scam.