“Certain PSBs have already taken action and in some cases, the work is still in progress,” a finance ministry statement said. One of the suspended employees among the 15 is from an insurance firm, the statement said. The portal, in its expose, had named largest public sector lender State Bank of India and also Life Insurance Corporation among 23 major public and private sector banks and insurance firms involved in money laundering activities.
In a release, the portal had said “…it establishes beyond doubt that money laundering is not confined to private banks, and is not an aberration, as is being made out in certain quarters…. it is rather endemic overarching the entire banking system and insurance sector, without exception, however shocking it might be.” In a similar operation in March this year, the same portal had accused private banks like HDFC Bank, ICICI Bank and Axis Bank of helping their customers convert black money into white.
Soon after the news release about the expose, Financial Affairs Secretary Rajiv Takru had asked the CMDs of various public sector banks and Life Insurance Corporation to take immediate action in the matter.
Meanwhile, a joint report Assocham and Resurgent India said in the absence of comprehensive anti-money laundering enforcement agency, India is becoming more vulnerable to money laundering activities.
“While India now has KYC norms in place in both money market and capital markets, these norms have failed to control Hawala transactions, as RBI cannot regulate them. Further KYC norms become less effective because of indifference shown by the implementing authorities. Increased competition in the market requires and gives motivation to the banks to lower their guard on this score,” it said.