No systemic issue found in Cobrapost expose, says RBI

The Reserve Bank of India (RBI) on Thursday said it has not found any systemic problem or scam in the recent expose made by online magazine Cobrapost.com via sting operations which alleged  three private sector banks of violating money laundering and KYC (know your customer) norms.

Interacting with reporters here, RBI Deputy Governor K C Chakrabarty said, “Allegations doesn’t mean flouting (of KYC norms). There is not a single transaction which has taken place.”

Chakrabarty, who is incharge of bank supervision department in the RBI, said:  “We cannot take action based on allegations, (only) if we find something ...that is a continuous process.” He also said supervisory process of RBI is very effective. "If we find something is wrong, we will always take action," he added.

Cobrapost.com had alleged that employees of some of the branches of ICICI Bank, HDFC Bank and Axis Bank were violating those norms. Following the expose, the banks had commissioned enquiry and had suspended the employees caught on hidden camera. RBI has also started probing the headquarters and the branches of these branches and have asked information from them.

Chakrabarty said the current guidelines are for avoiding money laundering are enough and there will be always some transactional issues when there are large number of happening daily. One can’t monitor all transactions, he said adding, “KYC violation will happen in any system. These are all transactional issues, it has nothing to do with money laundering,” Chakrabarty said.

He, however, admitted that current allegations give RBI chance to have look at all the norms and procedures again and if there is need of further tightening of the norms RBI will certainly do it.

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