Employees of a college in Vijayawada were shocked on receiving messages about deposits and withdrawal of amounts from their bank accounts.
On complaint by one of them, police launched investigation into the allegation against correspondent of Gandhiji Mahila College that he used the accounts of the staff members to deposit the demonetised currency notes of Rs 1,000 and Rs 500.
Police said they registered a case against Kanta Rao and were investigating as to how Rs 12 lakh were deposited in their banks and half of the amount was withdrawn.
However, no arrests had been made at the time of writing.
It is suspected to be a racket to convert the black money into white.
The money was deposited into 43 accounts of the staff members.
Police said Rs 20,000 to Rs 40,000 were deposited in each of these accounts in Tamil Nadu Mercantile Bank.
A police officer said Rs 6 lakh were also withdrawn.
Police were probing if the bank staff had colluded in bulk deposit and bulk withdrawals of cash.
The college correspondent, however, denied the allegations and said he had no knowledge of the transactions.