Apr 26, 2013 10:54 PM IST | Source:

ICICI Bk rules out money laundering, sees transaction error

ICICI Bank has stated that an internal inquiry did not find any trace of alleged money-laundering. However, the bank has hinted at some transactional errors that may have occured during the process.

Moneycontrol Bureau

India's largest private sector lender - ICICI Bank has not traced any evidence of alleged money laundering cases within it. It has just completed its internal investigation based on charges made by a media sting operation on top three private sector lenders. However, the bank has hinted at some transactional errors that may have occured during the process.

"The internal inquiry committee has submitted its reports," said Chanda Kochhar, CEO and MD of ICICI Bank in a conference call while announcing the fourth quarter earnings.

"No actual transaction has taken place. No other transaction has been found in respect of money laundering. There are indications of transactional errors but no case of money laundering. The external inquiry being carried out by Deloitte, is not yet finished. However, initial reports did not find any evidence of money laundering," she said.

A month back,, an investigative news website, ran a sting operation alleging that ICICI Bank, HDFC Bank and Axis Bank were involved in money laundering practice. Immediately after that, all banks came out with press statements giving clarifications and ordering internal and external investigations.

At ICICI Bank, there are around 18 employees allegedly involved in the Cobrapost expose. The bank has identified around 20 branches across India to be involved in the case.

"Based on our internal inquiry report, we have not yet taken the final call on those 20 employees. We will do it after all final investigation reports come. We will take measures accordingly," said Kochhar replying to a's query.

Earlier, HDFC Bank and Axis Bank had too refuted the claim of alleged money laundering practice. They did not trace any such case in their respective investigation. In their quarterly earnings conference calls, both banks had mentioned of not finding any evidence of alleged money laundering so far. 

The Reserve Bank of India (RBI) had discussed the issue with all those banks. Currently, it is investigating the matter. RBI deputy governor KC Chakrabarty had hinted at taking corrective measures to fix the problem. However, he had ruled out any systemic risk arising out of it.

Last week, Rajiv Takru, the secretary at the department of financial services - government of India, met the RBI in Mumbai. After the meeting, he said that the central bank report pointed out some "aberrations", and assured action against the erring parties.

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