Money-laundering by big banks, alleges Cobrapost; banks deny charges

New Delhi: Cobrapost, an online magazine, claims to have caught on camera what it describes as a massive expose, which allegedly proves that some of the largest private sector banks in the country help in money-laundering. The banks involved have denied the accusations.  

NDTV cannot verify the authenticity of the video footage, filmed largely on hidden camera,  and shared by Cobrapost executives at a press conference in Delhi today. 

A press release by  Cobrapost describes its "expose" as a "pan-India undercover investigation spanning several months, unearths a vast, nation-wide money laundering racket being run by HDFC Bank, ICICI Bank and Axis Bank. The brazen criminal activity by these banks is channelizing vast amounts of black money into the regular banking system as laundered white money." 

The banks allegedly offered to accept black money and invest it in insurance products and other bank services. They also offered lockers to stash the black money. Cobrapost claims the banks offered to open accounts without adhering to RBI guidelines and use 'benami' accounts to facilitate the conversion of the black money and keep the identity of the depositor a secret.

ICICI Bank said that it "conducts its business with the highest level of compliance," and that it has set up a committee to investigate the allegations, and expects a report within two weeks.  (Read: ICICI Bank's statement)

HDFC Bank said,  "We are concerned at the allegations that have appeared in the media.  The matter is being investigated on top priority. We would like to assure our customers and other stakeholders that the bank has always adhered to the highest standards of compliance and corporate governance and will continue to do so." (Read: HDFC Bank's statement)

Axis Bank, in a statement said, "Axis Bank has systems and processes that are robust and fully compliant with extant regulations. We will examine whatever information that is brought to our notice and investigate thoroughly."  (Read: Axis Bank's statement)

ICICI BANK's complete statement

"ICICI Group conducts its business with the highest level of compliance to legal and regulatory requirements.

All employees of the Group are trained and required to adhere strictly to the Group Code of Conduct, including AML and KYC norms. We have demonstrated our commitment to this by following a zero tolerance policy towards any violation.

We are deeply concerned with the media reports.

We want to assure our customers and all stakeholders that we are committed towards adherence to the high standards of business conduct, which is expected of us.

We have constituted a high level inquiry committee to investigate into the matter and submit its findings in 2 weeks."

HDFC BANK's complete statement

"We are concerned at the allegations that have appeared in the media.  The matter is being investigated on top priority.  The bank has a well-defined Know Your Customer (KYC) and Anti Money Laundering (AML) policy which contains procedures and controls to identify and prevent the types of transactions mentioned in the Cobrapost press release.  

Segregation of frontline sales activities and back office operations and post transaction monitoring processes are in place to ensure independent checks & balances and adherence to all the laid down policies and procedures of the bank.  Any deviation is viewed very seriously and stringent action is taken both at an organizational and employee level.

We would like to assure our customers and other stakeholders that the bank has always adhered to the highest standards of compliance and corporate governance and will continue to do so."

AXIS BANK's complete statement

"Axis Bank has systems and processes that are robust and fully compliant with extant regulations. We will examine whatever information that is brought to our notice and investigate thoroughly.  The Bank has built a strong customer franchise over the years and maintains high corporate governance standards.

Any deviations to such standards are viewed very seriously. Best practices across businesses are followed by the Bank and we are confident that all our businesses will live up to the high standards we have set for ourselves as a Bank."