Rajnish Kumar, Managing Director of SBI, admits there are instances of fraud in banks.
As raids on banks and individuals across the country are throwing up hoards of black cash in new currency notes, questions are being asked if banks are complicit in money laundering.
Talking to NDTV exclusively, Rajnish Kumar, the Managing Director of State Bank of India, India's largest bank, admits there are instances of fraud, but says it is only a small fraction of the total transactions.
According to tax officials, approximately Rs 120 crore has been seized until December 6. They have found Rs 1,500 crore of unaccounted income.
In that same period, he said SBI has handled 31 crore payment transactions, an average of more than a crore daily, distributing a total of Rs 1.4 lakh crore. Overall, banks have disbursed around Rs 4.3 lakh crore in this period.
"The one thing to be mentioned is that we have to look everything in proper perspective," said Mr Kumar, adding that "banks are carefully recording how each and every rupee is being dispersed".
Mr Kumar told us that one of the most likely ways for crooked bank officials to perpetuate fraud is through the conversion of banned currency to new notes.
Since there are limits on the amount of cash that can be exchanged, Mr Kumar explained that some dishonest bank employees may be working with the money launderers handing over more cash than what is permitted, thereby flouting the RBI instructions.
These would be any official in charge of the banks currency chests.
However, this fraud, he says, can be easily spotted. "It can be found very easily who has done this, and where it has happened," said Mr Kumar.
Within the SBI network, he says 16 cases of fraud have been detected. "All 16 have resulted in suspension and initiation of inter-departmental action, filing of suspicion transaction report and filing of FIR with police and filing of suspected fraud to RBI," he said.