Cobrapost expose: Banks suspend employees under FinMin heat

In the aftermath of Cobrapost 2, state-owned lenders including PNB, BoB and IDBI Bank on Tuesday suspended cumulatively five officials allegedly involved in money laundering and KYC violation norms. The finance ministry is exerting pressure on all institutions to take rapid actions, sources from the banking industry told moneycontrol.com.

May 08, 2013 / 10:31 AM IST
 
 
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Saikat Das
moneycontrol.com


In the aftermath of Cobrapost 2, state-owned lenders including Punjab National Bank (PNB), Bank of Baroda (BoB) and IDBI Bank on Tuesday suspended cumulatively five officials allegedly involved in money laundering and KYC (Know Your Customers) violation norms.  The finance ministry is exerting pressure on all institutions to take rapid actions, sources from the banking industry told moneycontrol.com.


All those suspension can be revoked provided final investigation reports exonerate them.


Online investigative news website Cobrapost had carried out a sting operation on 23 financial institutions including large public sector banks, insurance companies and some mid size private sector lenders. In a press conference on Monday, it alleged all those of helping people convert black money into white by way of investment in their schemes.


India's third largest lender Punjab National Bank (PNB) on Tuesday suspended two out of three employees allegedly involved in Cobrapost expose. Those were working in South Delhi and Noida branches in the capacity of cheif manager and assistant general manager. However, decision is not yet taken on the third employee based in South Delhi.


"The bank prima facie has not found any evidence of violations. The conversations between Cobrapost and bank officials were purely of colloquial nature. Investigation is on. We are looking into the matter," said a senior official from PNB confirming the development. He did not wish to be quoted.


Similarly, IDBI Bank suspended two junior officials based in New Delhi. Bank of Baroda too is believed to have suspended one chief manager at Parliament Street branch.


According to a BoB official, all involved managers were doing business on behalf of respective banks, not for individual gains. However, banks are probably acting under ministry pressure.


"Any suspension does not prove somebody's guilt. They will be relieved from work till the final investigation report comes out. We are conducting our own investigation. It is not our responsibility to cross check the source of money. We can always refer it to FIU," said a senior banker from IDBI Bank.


It is a normal practice for a branch manager (of any bank) to report any suspicious transaction to the Financial Intelligence Unit (FIU), the government agency which reports the same to the Income Tax Department.


Earlier on Monday, the finance ministry had started scrutinizing the video footage shown in the exposure. Rajiv Takru – the secretary at Department of Financial Services had asked all state owned banks and the Life Insurance Corporation (LIC) of India to initiate actions.


"I assume that the DVDs contain what is genuine material because that would be in the fitness of things. I don't think anybody would do something like this on the basis of fabricated evidence, so we assume that whatever has been shown in the DVDs prima facie is correct or reflects the transaction as it happened. At this moment we are not talking in terms of forensic examination of DVDs," he told CNBC TV18.

saikat.das@network18online.com

first published: May 7, 2013 10:39 pm

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