The Reserve Bank of India (RBI) could ask all banks in the country to undertake rigorous internal scrutiny exercises to ensure that there are no cases of discrepancy in any transaction. It has already launched investigations on allegations of money laundering practices at private sector banks -
ICICI Bank, HDFC Bank and Axis Bank.
"We will surely look into the matter and banks may be asked to do an internal scrutiny of all transactions beyond an amount," a senior RBI official said.
Official sources said while stringent Know Your Customer norms exist, RBI could issue stricter guidelines for their adherence.
"If the RBI finds some gaps in KYC and money laundering norms then it will try to plug the gaps by issuing stringent guidelines," said Dinesh Shukla, banking analyst, Sharekhan.
"Even if the RBI does not officially ask banks to undertake internal scrutiny, most banks would look into transactions to be on the safe side and ensure there has been no lapse," said a senior executive at an MNC bank, who did not wish to be identified.
ICICI Bank, HDFC Bank and Axis Bank have already announced investigations.
Meanwhile, finance ministry officials, government agencies and regulators are co-ordinating their efforts for probing charges.
A Goldman Sachs report recommending a sell on HDFC Bank said the allegations, if proven, could slow growth for private sector lenders in India: "RBI may direct private sector banks to focus on improving risk management rather than expanding."
"Banks will now be extra cautious in dealing with high net-worth individuals," said a senior official of a private sector bank.