MUMBAI: Shares in India’s ICICI, Axis and HDFC banks fell yesterday after the central bank found them guilty of violating guidelines relating to customer verification and anti-money-laundering.
The three banks were probed for suspected laundering after a sting operation by news outlet Cobrapost in March and April exposed alleged business irregularities at Indian financial institutions.
An investigation by the Reserve Bank of India did not reveal any direct evidence of money laundering, but some violations of rules were found after scrutinising the books and business operations of the three banks.
“We came to the conclusion that some of the violations were substantiated and warranted imposition of monetary penalty,” an RBI statement said.
The RBI said late on Monday that it had fined Axis Bank Rs50m ($855,000), HDFC Rs45m and ICICI Rs10m.
Axis Bank shares fell 2.53 percent to Rs1,322.0 in Mumbai trading yesterday, while ICICI was down 3.42 percent at Rs1,080 and HDFC lost 0.68 percent to Rs672.65.
The RBI said any “conclusive inference” in relation to money laundering could be drawn only if there was an investigation of the transactions by tax and enforcement agencies.
Various banks suspended staff after the Cobrapost allegations, which called the scale of money laundering “vast and unfathomable”.
Cobrapost in May released some secret recordings of conversations it made with officials from banks and insurance firms. Bank officials were heard confirming that money launderingwas common and they would “help” people who wished to do it.
Cobrapost in March released recordings of conversations with bank employees who were heard agreeing to take cash from an undercover reporter posing as a customer, although no money changed hands.
AFP
