The Reserve Bank of India is probing the Cobrapost sting operation on alleged money laundering by top banks. The RBI report has revealed major irregularities in top banks.
The report shows string of violations on several counts. Sources say the RBI report reveals dummy PANs, unknown NRO IDs, unauthorised gold sale, rampant non-compliance of KYC norms and irregular staff trips.
Sources say the RBI probe into ICICI Bank reveals cash transactions over Rs 10 lakh from unknown sources in non-resident accounts. There are close to 1,000 cases of customers with multiple IDs in 14 ICICI Bank branches. It reveals cash above Rs 50,000 accepted without a PAN number.
The report on HDFC Bank reveals violaton of KYC norms. Up to Rs 5 lakh cash was accepted for gold per day per customer, say sources.
The RBI report on Axis Bank shows transactions over Rs 4,500 crore without a PAN number. It shows branch officials accessed internal accounts to park funds.Cobrapost had revealed that 23 banks and insurance companies have been engaged in money laundering. Among the 23 banks involved are mostly PSU banks including some big names like the State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, IDBI, Oriental Bank and Dena Bank.
Cobrapost editor Aniruddha Bahal claimed that both banks and the insurance companies flouted the Foreign Exchange Management Act (FEMA) rules, Reserve Bank of India (RBI) guidelines and KYC norms. The website alleged that banks accepted unaccounted cash and invested in insurance products thereby hinting at a two-way street between the two.
The sting operation also alleged that splitting of transactions among banks happened to avoid detection. Earlier this year, Cobrapost across various branches of private financial institutions had revealed how bank employees were accepting black money from customers to convert them into white money. Cobrapost claimed that the nationwide operation shows how private banking and insurance affiliates launder money as part of standard procedures.
The sting also showed that money laundering services were openly being offered even to walk in customers who wished to launder their money and a variety of options were being offered.