HDFC Bank probes money laundering allegations

HDFC Bank, the second largest private sector lender in the country, today said it is investigating the allegations of being involved in money laundering on a top priority basis.

"We are concerned at the allegations that have appeared in the media. The matter is being investigated on top priority. The bank has a well-defined know your customer (KYC) and anti-money laundering (AML) policy, which contains procedures and controls to identify and prevent the types of transactions mentioned in the Cobrapost press release," HDFC Bank said in a statement.

"Segregation of frontline sales activities and back office operations and post transaction monitoring processes are in place to ensure independent checks and balances and adherence to all the laid down policies and procedures of the bank. Any deviation is viewed very seriously and stringent action is taken both at an organisational and employee level. We would like to assure our customers and other stakeholders that the bank has always adhered to the highest standards of compliance and corporate governance and will continue to do so," it added.

Earlier today, Cobrapost, an online magazine, claimed that its undercover investigation has revealed that lenders like ICICI Bank, HDFC Bank and Axis Bank run money laundering rackets.

These money laundering services are openly offered to even walk-in customers who wish to launder money. "A variety of options for laundering ill-gotten cash are being offered brazenly. These money laundering services are being offered practically as a standard product across the country," Cobrapost said in a press statement.

Cobrapost claims that it has captured the money laundering racket run by these banks on video tape, which runs into "hundreds of hours".

ICICI Bank, the largest private sector lender in India, said it has constituted a high level inquiry committee to probe allegations. The committee will submit its report within two weeks.

"We are deeply concerned with the media reports. We want to assure our customers and all our other 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 two weeks," the bank said in a statement.