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Cobrapost sting: banks start action against employees

15 officials have been suspended, 10 have been divested of their work and six have been asked to proceed on leave
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First Published: Wed, May 08 2013. 12 02 AM IST
Cobrapost on Monday alleged that employees of 23 state-run and private financial institutions have been involved in helping potential customers violate KYC norms and laws under the Prevention of Money Laundering Act and the Income Tax Act. Photo: Priyanka Parashar/ Mint
Cobrapost on Monday alleged that employees of 23 state-run and private financial institutions have been involved in helping potential customers violate KYC norms and laws under the Prevention of Money Laundering Act and the Income Tax Act. Photo: Priyanka Parashar/ Mint
Updated: Wed, May 08 2013. 07 10 PM IST
New Delhi: State-run banks that were accused of aiding money laundering by online magazine Cobrapost have started taking action against errant employees.
While 15 officials have been suspended, 10 have been divested of their work and six have been asked to proceed on leave, the finance ministry said in a statement.
After the expose on Monday implicated officials from financial institutions, including State Bank of India and Life Insurance Corp. of India, financial services secretary Rajiv Takru had asked the companies to take immediate action. The Insurance Regulatory and Development Authority has also asked the insurers named in the sting operation to investigate the allegations.
“Certain PSBs (public sector banks) have already taken action and in some cases, the work is still in progress. More action-taken reports are expected in near future,” the ministry said in a statement.
Cobrapost on Monday alleged that employees of 23 state-run and private financial institutions have been involved in helping potential customers violate KYC (know your customer) norms and laws under the Prevention of Money Laundering Act and the Income Tax Act.
Other state-run banks named include Canara Bank, Bank of Baroda, Punjab National Bank, Oriental Bank of Commerce, Indian Bank, Indian Overseas Bank, Dena Bank, Allahabad Bank, Corporation Bank, IDBI Bank Ltd and Central Bank of India.
Some of the private sector banks and insurance companies named include Yes Bank Ltd, Reliance Life Insurance , Birla Sun Life , Tata AIA Life Insurance Companies, Dhanlaxmi Bank Ltd, Development Credit Bank Ltd and Federal Bank.
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First Published: Wed, May 08 2013. 12 02 AM IST
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