Banks, insurance firms deny money laundering charge

Money laundering charge: FinMin asks banks, LIC to act tough
May 6, 2013
The money laundering trail
May 6, 2013

Banks, insurance firms deny money laundering charge

M. Narendra, Chairman and Managing Director, Indian Overseas Bank said, “We have been inquiring two lower level officers who have been identified in this accusation (Cobrapost). However, no such instances or violations have occurred as claimed by Cobrapost.”

“Action can be taken once we identify any wrongdoings. Moreover, after this, we will reiterate the same guidelines across the bank branches,” the IOB chief said.

In its second expose, Cobrapost has said 23 banks, both private and public, and insurance companies are engaged in money laundering and KYC norms violations. These banks include State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, Indian Bank, Indian Overseas Bank and Central Bank of India, among others.

K.C. Chakrabarty, Deputy Governor, Reserve Bank of India, in a post-policy analysts’ call on Monday, said: “We are seeing how the banks are following up on the KYC norms. Based on this, we will issue showcause notices and action will be taken. However, we have verified and not found any irregularities. There are certain differences in the manner of reporting of KYC norms in banks. We need to strengthen KYC guidelines and respective departments have to take action,” Chakrabarty said.

D.D. Singla, General Manager, Bank of Baroda, said the bank was investigating into the matter and would take stern action in case of any deviation of guidelines.Private lenders Federal Bank and Development Credit Bank in their statements have said they have initiated investigations into the matter. Mid-sized lender YES Bank declined to comment.


The Insurance Regulatory and Development Authority said in a statement that it is examining the matter and has asked the concerned insurance companies to file a report on the allegations based on which it will take appropriate action.

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