Cobrapost allegations: Action against 31 employees of public-sector banks, LIC

A day after a web portal alleged instances of money laundering by some state owned banks and Life Insurance Corporation (LIC), the government said on Tuesday that action has been taken against 31 officers and employees, including suspension, for violation of various regulations.

"So far, 15 officers/employees of various public sector banks have been suspended including one from insurance sector. Beside it, ten officers of PSBs have been divested of their work and six have been asked to proceed on leave", Finance Ministry said in a release.

The action against the employees has been taken for violation of banking norms and regulations, it added. This followed a directive by Financial Services Secretary Rajiv Takru to CMDs of public sector banks and LIC to take immediate action following Cobrapost, Red Spider 2 expose which was released on Monday.

"...certain PSBs have already taken action and in some cases, the work is still in progress. More action taken reports are expected in near future," the release said without providing details of employees or the banks.

Mr Takru has also sought action taken report from bank chiefs and Life Insurance Corporation (LIC) "on utmost priority" in this regard.

The portal had said in a release, "In its continuing undercover operation, spanning several months, Cobrapost finds dozens and dozens of major public sector banks, and many more private banks, across the country are blatantly involved in money laundering, as are major insurers. In all, 23 banks and insurance companies have been exposed."

Those named in the expose include SBI, LIC, Punjab National Bank (PNB), Bank of Baroda, Canara Bank, Reliance Life, Tata AIA, Yes Bank, Indian Bank, Indian Overseas Bank, IDBI Bank, Oriental Bank of Commerce, Dena Bank, Corporation Bank, Allahabad Bank, Central Bank of India, Dhanlaxmi Bank, Federal Bank, DCB Bank and Birla Sun Life.

Besides the Finance Ministry, insurance regulator IRDA had said it too was examining the allegations and that "action would be taken against the guilty at the earliest".