Cobrapost Expose 2: Banks, LIC face FinMin heat
Stung by Cobrapost second expose, the Finance Ministry today directed state-owned banks and LIC to take punitive action against erring employees.
The Ministry asked all state-owned entities named in the sting operation to initiate an inquiry and complete it quickly.
The names include State Bank of India, Life Insurance Corporation, Punjab National Bank, Canara Bank and private sector players such as YES Bank, Reliance Life, TATA AIA Life, and Birla Sunlife Insurance.
Revealing the findings of its operation codenamed Red Spider Part 2, Cobrapost alleged that 23 major Indian banks (public and private) and insurance companies are running a money-laundering racket.
Cobrapost has captured on video-tape how employees of banks and life insurers are helping customers launder unaccounted cash, bypassing KYC (know-your-customer) norms. They offer to invest unaccounted cash in products that form part of the regular financial system and help launder the unaccounted money, it alleged. The laws violated include the Prevention of Money Laundering Act, the Income Tax Act and the Indian Penal Code, it said. Read more
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