Investigative website Cobrapost on Friday released fresh videos of bank officials from three leading banks openly admitting to laundering huge sums of money for real-life politicians.
“The objective is to again establish that these activities are not exceptions, as being bandied about by certain quarters, but a rule across the breadth and length of our country in these banks,” said a statement from Cobrapost.
“These fresh cases also punch gaping holes into the claims of these quarters that Indian banking system is ‘robust’, and leave one wondering if the Indian banking system is vulnerable to abuse by forces inimical to the Indian State, its economy and its polity, to fund their activities,” added the release.
We have culled out instances where officials of these banks have confessed to past criminality. This clearly proves that these officials completed transactions in the past and that should be a subject matter of a vigorous, custodial investigation. Nothing of that sort is even on the cards.
Cobrapost has alleged that HDFC Bank’s officials offered customers to stash away funds in lockers outside regular banking hours so that their identity remained secret and their transactions weren’t recorded. ICICI Bank officials were shown allegedly helping clients evade tax by listing them as agriculturists. Axis Bank officials were alleged to have offered “sundry” accounts of the bank to deposit all the illegal cash from where it is to be routed into investment.
That the banks have admitted to using their personnel in channelizing vast amounts of black money into the regular banking system as laundered white money is sufficient to have them investigated by neutral, third party Government entities. The country should not have to rely on internal enquiries by these banks who were themselves the culprits and beneficiaries of their money laundering practices.
Although it was very much desirable for the RBI, as the regulator of banking system in the country, to come clean on such issue of national import as money laundering, it is apparent from the statements of its high-ranking officials, issued in the span of the past fortnight, that they are turning a Nelson’s eye to the issue.
For instance, RBI Deputy Governor K.C. Chakrabarty on March 21 gave these banks a clean chit when he said: “There is no scam (that) has happened ... As no transaction has taken place. let us not unnecessarily downgrade ourselves. Our system to prevent money laundering is perfect ... absolutely nothing (wrong with it).”
Two days later, his boss RBI Governor D. Subbarao too said that the Operation Red Spider only showed bank executives canvassing for certain illegal transactions but no such transaction had actually happened.
Nothing can be farther from truth.
“The inexplicable delay in interrogation of the bank officials, in conducting search operations, is allowing those with slush funds, and their custodians, to clean up their act,” said the release.
“The fresh cases should now serve an eye opener to all agencies to act in a decisive manner to deal with the issue,” added the release.
In light of these developments, and the conflict of interest it is faced with, one wonders if the RBI is competent enough to discharge its mandate of monitoring the banking system. Or, should the task handed over to some other agency, equipped both professionally and technologically to clean up the system and restore the fast dwindling confidence of the lager public in the financial institutions of the country, evident in the slipping values of their scrips on the bourses
The three largest private banks were accused of indulging in money laundering in March both within and outside with Cobrapost claiming that a sting operation conducted by it has revealed a scam.
The online portal played the contents of purported video recording of officials of HDFC, ICICI and Axis banks 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.