The money laundering trail
May 6, 2013
Cobrapost bites banks, insurers
May 7, 2013


As many as 23 public and private sector banks and insurance companies were accused by the website of “running a nation-wide money laundering racket, blatantly violating laws of the land”.

Taking note of the development, Financial Services Secretary Rajiv Takru said, “I have asked Indian Banks Association (IBA) to look into Cobrapost allegations…There is a need to examine allegations.” He said three senior officials have been asked to look into the issue.

State Bank of India (SBI) Chairman Pratip Chaudhuri told mediapersons that the bank would investigate the allegations and take severe action against those found guilty.

The insurance sector regulator Insurance Regulatory and Development Authority (IRDA) said it is examining the allegations of money laundering levelled against insurance companies and action will be taken against the guilty at the earliest.

“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,” IRDA said in a release.

Responding to Cobrapost allegations, LIC said that it has an effective system for compliance of all statutory and regulatory norms, but added that “in case of violation is noticed at any level necessary action will be taken by the Corporation”.

Cobrapost released a fresh set of CDs in what it described as the sequel to its earlier sting operation whose results it had released in March this year where it had alleged that leading private banks like ICICI Bank, HDFC Bank and Axis Bank were indulging in money laundering by flouting Know Your Customer (KYC) norms.

The fresh set of CDs showed visuals of representatives of various state-owned banks and several private as well as Government-run insurance companies allegedly convincing customers about several such “deals” assuring them of good returns.

Editor of the website Aniruddha Bahal told a packed press conference that his team’s investigations stretched over six months and included several States including Delhi, Uttar Pradesh, Haryana, Rajasthan and Andhra Pradesh.

The website alleged that the financial institutions named by it were reportedly helping customers convert their black money into white, something which was being probed by the Reserve Bank of India (RBI) in the aftermath of Cobrapost’s first revelation in March.

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