Govt, RBI looking at allegations against pvt banks: FM

3 private sector banks -- ICICI Bank, Axis Bank and HDFC Bank -- named in the sting operation have taken action by suspending staff concerned pending investigation

The government and the Reserve Bank are closely looking at money laundering allegation against some officials of the leading private sector banks, Finance Minister P Chidambaram said today.

"Secretary, Department of Financial Services is looking at it closely. RBI is looking at it closely. They (banks) themselves have instituted enquiries. Let's give them a little time to come up with the report of the enquiry," Chidambaram said in a response to the action being taken on money laundering charges.

Meanwhile, three private sector banks -- ICICI Bank, Axis Bank and HDFC Bank -- named in the sting operation have taken action by suspending staff concerned pending investigation.

Last week, the portal Cobrapost had played the contents of a purported video recording of officials of private banks including Axis Bank, allegedly agreeing to receive unverified sums of cash and put them in their investment schemes and benami accounts in violation of anti-money laundering laws.

The footage taken in 'Operation Red Spider' purportedly shows a number of senior executives of the three banks verbally agreeing to take huge amounts of cash from the undercover reporter and putting them into a variety of long-term investment plans so that the black money ultimately is converted into white.

However, neither any account was opened nor any cash was deposited in these banks.

As part of corrective action, HDFC Bank has hired independent audit firm for conducting forensic enquiry while Axis Bank initiated a probe into the matter.