In quick response to a finance ministry directive to identify and suspend any employee who can be identified in the Cobrapost video as appearing to advise potential customers in violation of the existing banking norms, public sector banks have suspended 15 employees.
In addition to the 15 suspended, an employee of the insurance sector has been suspended, while ten officers of state-run banks have been divested of their work. “Six employees have been asked to proceed on leave. More action taken reports are expected in the near future,” a finance ministry statement said.
The finance ministry had sought compliance and action-taken report as an utmost priority from the public sector banks and Life Insurance Corp, the country’s largest insurer. “Certain PSBs have already taken action and, in some cases, the work is still in progress,” the statement went on to add.
On Monday, investigative website Cobrapost claimed in a sting operation that 23 major Indian banks, both public and private, and insurance companies, including State Bank of India and Life Insurance Corporation, allegedly offered to launder money by sidestepping regulation.
The sting operation caught on tape bank employees offering to put aside knowyour-customer (KYC) norms to open bank accounts and deposit cash in various investment instruments without proper documents. “Twenty three major Indian banks, both public and private, and insurance companies are running a nationwide money laundering racket, blatantly violating the laws of the land,” Cobrapost said in a press release on Monday, nearly two months after making a similar accusation against three private banks.
On Monday itself, the finance ministry had asked banks to initiate a detailed scrutiny of these officers’ work and institute a special audit, if necessary, for this purpose. “The inquiry must be initiated and completed expeditiously,” the ministry had said.
In March, the news portal had accused private banks ICICI Bank, HDFC Bank and Axis Bank of money laundering. The banks have denied the allegations, saying none of the conversations had actually led to any transaction. According to financial services secretary Rajiv Takru, an investigation initiated by the central bank into the March expose has showed certain “aberrations”, but ruled out systemic risk. The report is yet to be released. Cobrapost raised questions on the investigations done by the RBI and demanded that other investigative agencies be involved.
• ON MONDAY ITSELF, THE FINANCE
ministry had asked banks to initiate a detailed scrutiny of these officers’ work and institute a special audit
• THE NEWS PORTAL HAD ACCUSED
23 major Indian banks, both public and private, and insurance companies, including Life Insurance Corporation, of money laundering by sidestepping regulation
Source :The Economics Times.
Date : 08/05/2013