The government and the regulators have sought a detailed report on ‘utmost priority’ regarding the allegations made by investigative website Cobrapost against 23 banks and financial institutions.
“I have asked Indian Banks Association (IBA) to look into Cobrapost allegations... there is a need to examine allegations,” said Rajiv Takru, secretary, department of financial services.
The finance ministry in the statement said “The secretary has asked the chairman-cum-managing directors (CMDs) for a detailed report on utmost priority with the name of the employee/designation and action taken.”
Insurance Regulatory and Development Authority (IRDA) also said it has asked insurers to submit detailed reports. “The insurance companies concerned have been asked to file a report on the allegations. The matter is under examination and appropriate action will be taken at the earliest,” the regulator said.
Banking regulator the Reserve Bank of India has already launched suo-moto probe regarding the allegations.
State Bank of India (SBI), India largest lender, said that it would investigate the allegations and take severe action against those found guilty.
“So far, it does not indicate if KYC violations have been done. But if they have been done, people would be severely punished,” said Pratip Chaudhuri, chairman, SBI. “We are very clear that there is zero tolerance for any money laundering or working around the KYC.”
“We categorically deny the baseless allegations in relation to any involvement of the company in money-laundering by customers of our life insurance business. We adhere to strict internal controls, processes and best practices and is in full compliance with the KYC norms,” Reliance Capital said. “As part of its ongoing compliance efforts, we will continue to examine any specific instances that come to light for appropriate remedial action, if any.”
Other financial institutions named by Cobrapost also said that they have initiated enquiry.
“As a responsible bank, we conduct our business with strict adherence to extant regulatory guidelines, including specific focus on KYC and AML norms,” said Federal Bank.
“Any deviation will be viewed seriously and strict penal action would be initiated against the officials involved,” said IDBI Bank.
“We have initiated an internal enquiry into this incident and will take appropriate necessary action. We strictly adheres to our Anti-Money Laundering (AML) policy in line with the AML guidelines as stipulated by IRDA,” said Tata AIA Life Insurance.