The Reserve Bank of India (RBI) found violation of KYC (Know Your Customer) norms by HDFC Bank, ICICI Bank and Axis Bank allegedly involved in a money laundering expose done by Cobrapost.com, CNBC TV18 reported quoting sources.
An investigation carried out by RBI, according to sources, identified system failure to detect large cash transactions but not more than Rs 1-2 crore.
The investigation, sources told to CNBC-TV18, reveals that private banks allow customers to buy third party products in cash. Private banks do not verify KYC documents done by other banks.
In the Cobrapost sting operation, banks involved did not implement unique customer ID. At the same time, lapses were noted in KYC rules among cooperative banks as well.