Three lenders to be probed over money laundering.
Bureau Report
BANGALORE: The Reserve Bank of India (RBI) said it has begun investigating the allegations of money laundering made by online magazine Cobrapost.com last week against ICICI Bank Ltd, Axis Bank Ltd and HDFC Bank Ltd, today.
The apex bank has sent officials to the headquarters and branches of these three lenders to investigate the allegations made by Cobrapost, the RBI said in a release, reported Live Mint.
Apart from this, the RBI has also undertaken a thematic study in respect of banks that are active in selling gold coins/ wealth management products to examine whether there are systemic issues and to plug deficiencies and legal loopholes, the RBI said.
“The scrutinies have been initiated after an online media firm called Cobrapost.com, on the basis of its sting operations across some branches of these banks, alleged money laundering and violation of several provisions of the Reserve Bank of India Regulations, Foreign Exchange Management Act guidelines, Prevention of Money Laundering Act (PMLA), etc.,” the RBI said.
The media firm had uploaded videos on the Internet relating to these banks as well as ICICI Prudential Life Insurance and HDFC Life Insurance. The portal alleged that the three private sector lenders were involved in a “nationwide money laundering racket”.
The website said it had unraveled the fraud through undercover investigations at several branches of these banks and their insurance affiliates.
The investigation teams will submit their reports by 31 March and “thereafter further course of action as necessary will be initiated”, RBI said.
Following the allegations, Axis Bank, ICICI Bank and HDFC Bank started investigations into them. HDFC Bank suspended 20 officials, ICICI Bank suspended 18 executives and Axis Bank suspended 16 employees, pending the completion of investigations, according to Mint.
HDFC Bank has also appointed audit firm Deloitte Touche Tohmatsu India Pvt. Ltd and law firm Amarchand and Mangaldas and Suresh A Shroff & Co. to investigate the allegations.
Since the Cobrapost report, ICICI Bank has lost 3.2%, Axis Bank dropped 1.67%, while HDFC Bank has risen 1.33%. During this period, BSE’s benchmark Sensex has lost 0.36% and the Bankex, the gauge for the banking industry, has lost 0.3%. Both HDFC Bank and ICICI Bank are part of the Sensex.