Finance ministry swings into action on money laundering issue

Laundering charges a serious matter, says Banking secretary

Taking note of allegations of money laundering in three private banks, the government has begun the fact-finding work.

Rajiv Takru, Secretary, Department of financial services, told Business Standard over phone that it is an important matter. "The truth has to be established. It will not be glossed over," Takru said.

Reserve bank of India is already dealing with the development.

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

“We are trying to understand what the actual position is. Any violation of anti-money laundering rules and regulations will be treated as serious offence. The severe action will follow”,Takru said.

Three banks have already begun investigations. HDFC Bank, said it was investigating the allegations of being involved in money laundering on a top priority basis.

The shares of Axis Bank, HDFC Bank and ICICI Bank recovered in afternoon trades.

Analysts said they did not see risks to these stocks due to reports of banks allegedly indulged in money laundering.

Infact, all three bank stocks closed higher over previous close on the Bombay Stock Exchange. Axis Bank closed at 0.5% up at 1,354, ICICI up 2.3% at Rs 1,110 and HDFC Bank up 2.28% at Rs 649.