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Money laundering: Action against ICICI, HDFC Bank, Axis

Last updated on: April 19, 2013 08:32 IST

RBI finds 'aberrations' at ICICI, HDFC Bank, Axis Bank

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The government said action would be taken against ICICI Bank, HDFC Bank and Axis Bank on the basis of an RBI audit report which has detected certain "aberrations", a month after the private banks were accused of money laundering by an online news portal.

"An audit report has come and now the banks would probably be asked for their versions...We don't need to recommend anything; we discussed the issue and everybody will do whatever one is supposed to do after that. The RBI would be doing what they are required to do," Banking Secretary Rajiv Takru said outside the Mint Road office of RBI.

"I think it would be safe to say that there are actionable points where RBI would need to take some action and consequently government would also need to address them," he said.

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Image: HDFC Bank.


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Last week, Reserve Bank Deputy Governor H R Khan had said the central bank is initiating action against these banks.

"Actions are on the way. Scrutiny has been done, actions is being taken both in respect of systemic level and at the individual banks," he had said.

The banking secretary said that he has received RBI's interim audit report on the allegations levelled in the sting operation by news portal Cobrapost.

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Image: ICICI Bank ATM.
Photographs: Reuters.

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Money laundering: Action against ICICI, HDFC Bank, Axis

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However, Takru said he was not at the RBI to recommend specific actions in the regard.

The country's three largest private banks -- ICICI bank, HDFC Bank and Axis Bank -- were last month accused by Cobrapost of indulging in money laundering activities.

Takru said RBI audit report has found certain "aberrations" at ICICI Bank, HDFC Bank and Axis Bank.

"There is no risk of systemic failure. There are certain aberrations which we have discovered in the audit report. These would be addressed both in terms of systemic factors as well as individual cases," Takur said.

"Whatever responsibilities would have to be fixed will be fixed and whatever rectifications have to be done would be done," he added.

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Photographs: Reuters.

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The expose had led to worries over the non-compliance of know your customer norms and also raised concerns if this was a systemic problem.

All the three banks had initiated their internal inquiries and forensic audits, while two of them have also suspended nearly 40-odd people directly concerned pending inquiries.

When asked about the time-line by when the regulatory action can be expected in the regard, Takru suggested that one should not rush and action will be taken only after due considerations and hearing of all sides.

"There is absolutely no tearing hurry to run into some kind of hasty decision-making and in the process do something foolish. So, all concerned will be required to apply their minds, all concerned will be given a complete opportunity to explain. (and then) what is correct and appropriate would be done," he said.


Photographs: Reuters.

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