Top private sector banks to probe money-laundering accusations

Top private sector banks to probe money-laundering accusations

TV grab from sting operation conducted by Cobrapost

New Delhi:  Top private sector lenders ICICI Bank, HDFC Bank and Axis Bank say they are investigating allegations of widespread money laundering practices at their branches. In statements, the banks emphasized that they conduct business in strict compliance with the law.  (Read: ICICI Bank's statement | HDFC Bank's statement | Axis Bank's statement)

The Income Tax Department says it will investigate the charges.  The Deputy Governor of the Reserve Bank of India, Urjit Patel, said he is in touch with the lenders.  

At a press conference in Delhi, journalist Aniruddha Bahal who heads the news website said he had collected hundreds of hours of video recordings bank branches across the country. He did not say when the recordings were compiled.

NDTV cannot verify the authenticity of the video footage, filmed on hidden camera.

Cobrapost says an undercover journalist contacted different banks and said a politician needed help with laundering black or undeclared income. Cobrapost says the three banks suggested methods that were "imaginative in their range and brazen in their approach."

These included investing the black money in insurance products sold by the banks, according to the "expose."

Cobrapost claims that at some branches, officials allowed accounts to be opened without the required documents, allowing the identity of the depositor to remain concealed; that "benami" or shell accounts were allegedly opened; and that officials suggested splitting the black money into different accounts to avoid detection.

However, no account was opened nor any cash deposited in these banks.

ICICI BANK's complete statement

"ICICI Group conducts its business with the highest level of compliance to legal and regulatory requirements.

All employees of the Group are trained and required to adhere strictly to the Group Code of Conduct, including AML and KYC norms. We have demonstrated our commitment to this by following a zero tolerance policy towards any violation.

We are deeply concerned with the media reports.

We want to assure our customers and all stakeholders that we are committed towards adherence to the high standards of business conduct, which is expected of us.

We have constituted a high level inquiry committee to investigate into the matter and submit its findings in 2 weeks."

HDFC BANK's complete statement

"We are concerned at the allegations that have appeared in the media.  The matter is being investigated on top priority.  The bank has a well-defined Know Your Customer (KYC) and Anti Money Laundering (AML) policy which contains procedures and controls to identify and prevent the types of transactions mentioned in the Cobrapost press release.  

Segregation of front line sales activities and back office operations and post transaction monitoring processes are in place to ensure independent checks & balances and adherence to all the laid down policies and procedures of the bank.  Any deviation is viewed very seriously and stringent action is taken both at an organizational and employee level.

We would like to assure our customers and other stakeholders that the bank has always adhered to the highest standards of compliance and corporate governance and will continue to do so."

AXIS BANK's complete statement

"Axis Bank has systems and processes that are robust and fully compliant with extant regulations. We will examine whatever information that is brought to our notice and investigate thoroughly.  The Bank has built a strong customer franchise over the years and maintains high corporate governance standards.

Any deviations to such standards are viewed very seriously. Best practices across businesses are followed by the Bank and we are confident that all our businesses will live up to the high standards we have set for ourselves as a Bank."

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