Indian banks suspend staff after laundering revelations

Cobrapost strikes banks Mumbai – Arabstoday Leading Indian banks have suspended staff on government orders after a media sting operation revealed suspected money laundering at more than 20 financial institutions, reports said Wednesday. Indian news outlet Cobrapost made the allegations on Monday based on two undercover investigations carried out by its team, leading the finance ministry to call for immediate action against any staff involved.
\"The Secretary, Financial Services has also asked for a detailed report on utmost priority with the name of the employee/designation and action taken,\" said the statement on the ministry website late Monday.
Media reports quoting the ministry on Wednesday said 15 employees of various public sector banks have been suspended, while another 10 officers have been divested of their work and six have been asked to take leave.
The banks named for business irregularities include the country\'s largest bank State Bank of India and state-run insurer Life Insurance Corporation (LIC).
The New Delhi-based Cobrapost website calls the scale of money laundering \"vast and unfathomable.”
In its latest sting operation \"Operation Red Spider 2\" Cobrapost released some recordings of conversations it made with officials from banks and insurance firms on their site.
Bank officials were heard confirming that money laundering -- whereby the source of money obtained by illicit means is concealed -- was common and they would \"help\" people who wished to do it.
\"Money laundering practices are part and parcel of banking and insurance business across the board,\" Cobrapost said in a statement on its website on Monday, based on its months-long investigations.
In March, Cobrapost carried out a similar operation, claiming it had evidence against three private banks -- ICICI, HDFC and Axis -- for facilitating money laundering.
India\'s central bank is investigating those allegations, but has downplayed the evidence provided so far.