Bengaluru: A pan-India undercover investigation by Cobrapost.com has found that Axis Bank, ICCI and HDFC were engaged in money laundering, flagrantly violating various RBI guidelines, the provisions of the Prevention of Money Laundering Act, the Income Tax Act, and KYC norms.
Such violations made the vast assets that the banks manage grow spectacularly, thus raking in huge windfall gains.
It only needed a simple visit to the bank with as simple a proposition: A politician wants to invest his tainted crores. The purpose: Make the money clean. Would the bankers help? And the veneer came unstuck, according to a press release from Cobrapost, an online investigating magazine.
Codenamed Operation Red Spider, a six-month long undercover investigation by Cobrapost found almost all Bank officials going overboard in helping the website’s reporter, posing as a relative of an imagined politician, invest black money in various products of the bank to make it “white,” the release said.
In their zeal to net the customer with deep pockets, bankers in branches of Axis Banks and other banks spread across several states, including Andhra Pradesh, Rajasthan, Haryana, Delhi, Uttar Pradesh and West Bengal, suggested innumerable ways to convert black money into white: invest in insurance, invest in gold, deposit the cash in bank’s account, split the cash in smaller chunks to avoid detection, open multiple accounts, and the likes. All these ways serve the purpose of the client well, fully covering the tracks so much so that government regulatory authorities would never get a whiff of such dubious transactions.
The modus operandi the bank officials revealed constitute the following:
* Open an account to route the cash into the Bank’s spread of products including insurance;
* Put the cash in accounts other than bona fide, like dummy accounts;
* Use sundry accounts of the bank to deposit illegal cash and get the pay orders for investment;
* Do it even without PAN card;
* Use provisions like Form 60 to deposit the illegitimate cash into the account to route it into investment;
* Get Demand Drafts made for the client even from other banks to facilitate investment;
* Split the money to invest in diversified portfolio including gold;
* Allot lockers for safe keeping the illegitimate cash;
* Show the illegal cash as proceeds from some sham agreements of land sale;
* Use duplicate PAN cards to route the cash transactions into investment;
* Send money abroad through NRE/NRO accounts; transfer cash using accounts of customers, for a fee; use some shell company to transfer money abroad showing it as expenses toward business-cum-leisure trip; transfer money using TCDC cards.
In a statement, ICICI Bank’ said: “ICICI Group conducts its business with the highest level of compliance to legal and regulatory requirements. All employees of the Group are trained and required to adhere strictly to the Group Code of Conduct, including AML and KYC norms. We have demonstrated our commitment to this by following a zero tolerance policy towards any violation.
We are deeply concerned with the media reports. We want to assure our customers and all stakeholders that we are committed towards adherence to the high standards of business conduct, which is expected of us. We have constituted a high level inquiry committee to investigate into the matter and submit its findings in 2 weeks.”
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