23 banks, LIC in money laundering

Cobrapost 'Operation Red Spider 2' exposes nationwide racket Making its second revelation on money laundering, the online portal Cobrapost has alleged that as many as 23 public and private sector banks and insurance companies are "running a nation-wide money laundering racket, blatantly violating the laws of the land." "Money laundering services are being offered openly as a standard product across the board. Even a walk-in customer can avail himself of such services that help him launder all his unaccounted cash. Money laundering practices are part and parcel of banking and insurance business across the board," Aniruddha Bahal, Editor, Cobrapost, alleged at a press conference. The sting operations revealed violation of several provisions under various Acts including Income Tax, FEMA, RBI, KYC norms, Banking Act, he said. "The revelations amount to crystal clear offences under IPC as well as the PMLA (Prevention of Money laundering Act)." The Cobrapost conducted investigations for more than six months in many states including Uttar Pradesh, Rajasthan, Delhi, Haryana, Andhra Pradesh and Karnataka. Those named in the expose include SBI, LIC, Punjab National Bank (PNB), Bank of Baroda, Canara Bank, Reliance Life, Tata AIA, Yes Bank, Indian Bank, Indian Overseas Bank, IDBI Bank, Oriental Bank of Commerce, Dena Bank, Corporation Bank, Allahabad Bank, Central Bank of India, Dhanlaxmi Bank, Federal Bank, DCB Bank and Birla Sun Life. This is the second expose by Cobrapost. Earlier on March 14, it had alleged money laundering by top private sector banks -- HDFC Bank, ICICI Bank and Axis Bank. Reacting to the expose, the banking regulator RBI is conducting investigations, while the banks have also initiated independent probe besides suspending some of their staffers. Cobrapost in its press release said, "Operation Red Spider 2 establishes beyond doubt that money laundering is not confined to private banks, and is not an aberration. It is rather endemic overarching the entire banking system and insurance sector, without exception; however, shocking it might be. The scale is vast and unfathomable," the portal said. Financial Services Secretary Rajiv Takru said, "I have asked Indian Banks Association (IBA) to look into Cobrapost allegations. There is a need to examine allegations." SBI Chairman Pratip Chaudhuri said the bank would investigate the allegations and take severe action against those found guilty. "So far, it does not indicate if KYC violations have been done. But if they have been done, the people would be severely punished," he said. "We are very clear that there is zero tolerance for any money laundering or working around the KYC." While denying the allegations, Reliance Life said: "As part of its ongoing compliance efforts, Reliance Life will continue to examine any specific instances that come to light for appropriate remedial action, if any."

man behind the expose Aniruddha Bahal, founder Editor of the online magazine Cobrapost.com, has worked as a journalist and Editor for India Today and Outlook. He co-founded Tehelka along with Tarun Tejpal in 1999, a news website, which carried out a sting operation to prove some of the members of Indian Cricket Team were involved in accepting bribes. He was also involved in another sting operation called Operations West End exposing corruption in defence contracts. The celebrity investigative journalist Bahal also wrote Banker 13, an espionage thriller, which brought him Bad Sex in Fiction Award. In 2005 he founded Cobrapost.com, carried out a sting operation, Operation Duryodhana, exposing parliamentarians accepting cash for asking questions in parliament.