The Reserve Bank on Monday said it has started a comprehensive scrutiny of head offices and branches of ICICI Bank, HDFC Bank and Axis Bank, which are accused of money laundering and violating regulations like FEMA and KYC. The scrutiny will be completed by March 31.
"The RBI has initiated the process of carrying out comprehensive scrutinies covering both, Head Office and branches of three private sector banks, namely, ICICI Bank, HDFC Bank and Axis Bank," the central bank said in a statement.
"The final reports on all the three banks will be completed by March 31, 2013 and thereafter further course of action as necessary will be initiated," it added.
The three private sector banks were accused of money laundering in a sting operation by online portal, Cobrapost.
"The scrutinies have been initiated after an online media firm on the basis of its sting operations across some branches of these banks alleged money laundering and violation of several provisions of the RBI Regulations," RBI said.
It further said the allegations also pertain to violation of Foreign Exchange Management Act guidelines, Prevention of Money laundering Act (PMlA), among others.
The media firm had uploaded some videos on the internet relating to these banks as well as ICICI Prudential life Insurance and HDFC life Insurance, RBI added.
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 loop-holes, if any, the statement added.
The Finance Ministry is also looking into the allegations.
“Secretary, Department of Financial Services is looking at it closely. RBI is looking at it closely. They (banks) themselves have instituted enquiries. let’s give them a little time to come up with the report of the enquiry,” Finance Minister P Chidambaram said in a response to the action being taken on money laundering charges.
Meanwhile, three private sector banks -- ICICI Bank, Axis Bank and HDFC Bank -- named in the sting operation have taken action by suspending staff concerned pending investigation.
last week, the portal Cobrapost had played the contents of a purported video recording of officials of private banks including Axis Bank, allegedly agreeing to receive unverified sums of cash and put them in their investment schemes and benami accounts in violation of anti-money laundering laws.
The footage taken in ‘Operation Red Spider’ purportedly shows a number of senior executives of the three banks verbally agreeing to take huge amounts of cash from the undercover reporter and putting them into a variety of long-term investment plans so that the black money ultimately is converted into white. However, neither any account was opened nor any cash was deposited in these banks.