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Even as the Reserve Bank of India on Thursday said it had completed investigations against the banks and other entities following the Cobrapost expose, the online portal released another set of instances of alleged money laundering, backed by videotaped evidence, by 10 more banks — five each from the public sector and private sector.
Cobrapost said it hoped the expose would prompt the authorities to not merely order investigation but act concretely, on the ground. “In this edition, codenamed Operation Red Spider Part III, we bring you 10 banking institutions...And, the murky world that exists within their walls, with junior to top level officials at dozens of branches admitting on camera their complicity in crime,” the portal said in a statement. The expose is the third in the damning series.
It said the videos, across the large spectrum of such illegal activities, “clearly prove” this is not simply the design of some criminally oriented officers or, for that matter, some young, front-office executives succumbing to performance pressures. “It proves without doubt that this corruption is endemic, and spread through the Indian banking and insurance system,” Cobrapost said.
The banks named in this third series of sting operations are Bank of India, Central Bank of India, Bank of Maharashtra, Allahabad Bank and Bank of Baroda (all government-owned), and IndusInd Bank, ING Vysya Bank, HDFC Bank, ICICI Bank and Axis Bank from among private lenders. The last three were also named in March, in the first expose.
On Monday, the portal had accused another 23 public and private sector banks and insurance companies, including State Bank of India (SBI), Life Insurance Corporation (LIC), Punjab National Bank (PNB), YES Bank, Federal Bank, Reliance Life, Tata AIA and Birla Sunlife, of “running a nation-wide money laundering racket”.
‘Not so grave’
In Srinagar, the RBI said it had completed investigating the banks named in the earlier Cobrapost expose and would take action if they were found guilty of violating prudential banking norms. “We have done investigations, we have prepared an internal report. There are processes to be followed to take investigations to its logical closure... The first is action against individual institutions who are involved in practices which are not consistent with the banking regulation and prudential banking,” RBI Governor D Subbarao told reporters.
On instructions from the finance ministry, some of the public sector banks and LIC, both named in the expose, have already taken action against 31 employees, including suspension of 15 staff members. Some of the private banks have also taken action against their employees, pending investigation.
However, Cobrapost said it wanted concrete action. “Whether such inquiries are followed up with visible and effective action on ground or not, only time will tell. But if the RBI and the finance ministry are waiting for more clinching evidence to finally act on it, we here present yet more shocking videos,” it said. The portal said the expose should normally awaken any law enforcement authority. “We hope the authorities wake up to the ground realities and start the requisite legal procedures,” it said.
SBI, named in the second operation, on Thursday said its bank officials’ advice on splitting deposits to evade taxes, as exposed by Cobrapost, were “undesirable loose talks” but there was no apparent criminality.
“Prima facie...it looks (like) there is no criminality in the sense that somebody has suggested splitting up your deposits, say Rs 50 lakh into Rs 50,000 or Rs 1 lakh. So far, it looks like loose talks but even that loose talk is undesirable,” Chairman Pratip Chaudhuri told reporters in Chandigarh.
In Delhi, PNB, whose employees were also caught on camera by the online portal, said there was no money laundering involved. “What happened was a dialogue. Two people have spoken and that has been captured. So, no money has been laundered, let me make it clear,” Chairman K R Kamath told reporters.
In Chennai, Indian Bank said it had suspended an official taped by the portal.
