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May 06, 2013, 08.34 PM IST | Source: Moneycontrol.com

SBI, LIC, pvt insurers part of money laundering: Cobrapost

Life Insurance Corporation, State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, Tata AIG, Dhanlaxmi Bank, Indian Bank, IDBI Bank, Yes Bank, Federal Bank, Reliance Capital, Birla Sunlife are among those named by Cobrapost in the money laundering scam.

Moneycontrol Bureau

In its continuing expose on the involvement of leading financial institutions in money laundering, media website Cobrapost Monday said that 23 major banks and insurance companies were part of the racket. 

In a sting operation in March this year, Cobrapost had showed how private banks like HDFC Bank, ICICI Bank and Axis Bank were helping their customers convert black money into white .

In its latest expose, Red Spider 2, Cobrapost has revealed that the money laundering racket is happening at a much larger scale with top state-owned banks and insurance companies being part of it.

Also read: Cobrapost 2: FinMin calls for action, banks to investigate

Life Insurance Corporation, State Bank of India , Bank of Baroda , Punjab National Bank , Canara Bank , Tata AIG, Dhanlaxmi Bank , Indian Bank , IDBI Bank , Yes Bank , Federal Bank , Reliance Capital , Birla Sunlife are among those named by Cobrapost in the scam.

"Operation Red Spider 2 establishes beyond doubt that money laundering is not confined to private banks, and is not an aberration, as is being made out in certain quarters in the wake of the first expose on March 14 in which HDFC Bank, ICICI Bank and Axis Bank were shown involved in money laundering; it is rather endemic overarching the entire banking system and insurance sector, without exception, however shocking it might be," the Cobrapost release said.

Also read: Why Cobrapost expose was a non-event for bank stocks

The Cobrapost release says investigations by its staff for more than half a year, and spanning many states including Uttar Pradesh, Rajasthan, Delhi, Haryana, Andhra Pradesh and Karnataka, have revealed some startling facts.

a) Money laundering practices are part and parcel of banking and insurance business across the board b) Even a walk-in customer can avail of such services that help him launder all his unaccounted cash and c) Money laundering services are being offered openly as a standard product across the board.

Also Read: Here's how banks, insurers help clients launder black money

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IDBI Bank Yes Bank Federal Bank
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