Cobrapost investigation: Action against banks involved in wrongdoings soon,says RBI

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Cobrapost investigation: Action against banks involved in wrongdoings soon,says RBI

Reserve Bank of India (RBI) today said it has completed investigations against banks following the Cobrapost expose and will take action if they are found guilty of violating prudential banking norms.

“We have done investigations,we have prepared an internal report. There are processes to be followed to take investigations to its logical closure…

“The first is action against individual institutions who are involved in practices which are not consistent with the banking regulation and prudential banking,” he said while addressing a press conference after the RBI’s central board meeting here.

Web portal Cobrapost in its string of expose has alleged money laundering and other wrong doings by several public and sector financial institutions ranging from country’s largest bank SBI to the youngest lender Yes Bank.

The central bank,Subbarao further said,has already taken systemic action to deal with the problem and many of them were announced in the annual policy document unveiled last week.

As far as individual banks are concerned,he said,”we got to follow procedure” before deciding on imposing penalty on them for violating the prudential banking norms.

On when the action was likely to be taken against erring banks,the RBI Governor said,”not possible to indicate time frame as there are processes involved.”

Subbarao further said,”if you go through policy documents that came out last Friday,there were initiatives which are by way of systemic action to address some of the deficiencies that have come to notice as a result of investigations.”

Some of the public sector banks and Life Insurance Corporation (LIC) have already taken action against 31 employees including suspension of 15 staff members. The investigations were still on. Certain private sector banks too have taken action against their employees.

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