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A confidential report prepared by Reserve Bank of India (RBI) on the Cobrapost exposé in March on HDFC Bank, Axis Bank and ICICI Bank has shown violations of regulatory norms.
Cobrapost had alleged brazen criminal, money laundering activity by these banks, channelising vast amounts of black money into the regular banking system as laundered white money.
The RBI probe supports these charges, of systemic misuse. It has found use of fictitious permanent account numbers issued by the income tax department, use of unknown non-resident ordinary (NRO) accounts, unauthorised gold sale and rampant non-compliance of Know Your Customer (KYC) norms. Apart from irregular staff junkets to bank officials selling insurance.
The probe has unearthed cash transactions over Rs 10 lakh from unknown sources in non-resident accounts. There are close to 1,000 cases of customers with multiple identity cards in several branches. The report reveals cash above Rs 50,000 accepted by the banks without a valid PAN number.
The report also reveals violation of KYC norms, with up to Rs 5 lakh cash accepted for gold. The report shows branch officials accessed internal accounts to park funds in cash.
Private insurance companies took bank officers for foreign junkets as a reward for selling policies.
“Our investigation, conducted across dozens and dozens of branches of these banks and their insurance affiliates, across all five zones of the country, revealed these shocking facts that these money laundering practices are part of a standard set of procedures within these three banks,” the web site editor, Anirudha Bahal, had said.
The three banks had set up internal committees and external agencies to probe the allegations. RBI also investigated and sent the report to the finance ministry. Based on the report, RBI is expected to take action against the three banks, a source said.
IN THE BAD BOOKS
- A confidential report prepared by Reserve Bank of India on the Cobrapost exposé in March on HDFC Bank, Axis Bank and ICICI Bank has shown violations of regulatory norms
- It has found use of fictitious PANs issued by the I-T department, use of unknown NRO accounts, unauthorised gold sale and rampant non-compliance of KYC norms
- The probe has unearthed cash transactions over ~10 lakh from unknown sources in non-resident accounts
