Money laundering: RBI suspends junior functionary, asks banks to do central data checking

Amid increased instances of money laundering, warns of stern action against wrongdoers

With more and more instances of money laundering and fraudulent currency exchange surfacing, the Reserve Bank of India (RBI) on Tuesday warned of stern action against wrongdoers and asked banks to carry out a thorough central data checking, while it suspended a “junior functionary” who is being investigated.
 
“We have issued elaborate instructions to all banks to do the central data checking and wherever they find any inconsistency, it should be pursued further through their internal audit mechanism,” said deputy governor of RBI, S S Mundra, speaking to a select group of reporters here.
 
“Our supervisors are also carrying out similar exercise on various data points of banks and wherever any untoward kind of transactions or actions are noticed, due action would be pursued and due investigation would be carried out,” he said.

 

He denied the reports that RBI had issued show-cause notice to Axis Bank and was planning to cancel its banking licence following massive malpractices in currency exchange at many of its branches. “There is no such thing at this point of time. As I mentioned a while ago, wherever any such actions are reported, the enquiries are being made but as of now no show-cause notice has been issued (to Axis Bank),” Mundra said. Stating that many instances of money-laundering have come to the RBI's notice, he said already banks have taken action against the staff who were involved.

 
About the arrest of an RBI official in Bengaluru earlier on Tuesday, Mundra said: “Let me clarify it is a junior functionary of RBI and it was reported by the investigating agency that he was recorded to be present in a bank branch where this kind of transaction was happening. We have suspended the employee and have instituted investigation and due action will be taken once the details are known.”
 
“RBI and its team is also coordinating and collaborating with various investigating agencies.”