Taking a tough stand against erring banks exposed by the Cobrapost sting operation, the Reserve Bank of India (RBI) on Friday said it has not given a clean-chit to ICICI Bank, HDFC Bank and Axis Bank, which were accused of alleged money laundering and flouting KYC norms during the expose.
It further stated that the probe against the three banks is still on. “No we have not. And we are saying that we are (going) to issue show-cause notices. So, the inquiry is still in progress,” RBI Governor D Subbarao told reporters when asked whether the apex bank had given clean chit to the three banks.
Subbarao, speaking at the customary post-policy media interaction, asserted that while money laundering, which involves use of criminal money, has not been observed in any of the banks, certain “specific transgressions” on the know-your-customer (KYC) front have been discovered.
“We have talked to those banks, called those CEOs for a meeting, told them about what the deficiencies are and they have gone back and implemented some of the systemic improvements,” Subbarao said, adding RBI officials have also spoken with forensic auditors appointed by these banks.
Subbarao said RBI launched a suo motu probe following the sting operation by news portal Cobrapost early February.