Sting catches SBI, LIC ‘violating’ govt norms

New Delhi: Investigative website Cobrapost on Monday released fresh videos alleging widespread wrongdoing by a host of financial sector entities, including state-run giants State Bank of India and Life Insurance Corporation and private players such as Yes Bank, Federal Bank, Reliance Life Insurance, Tata, AIG and Birla Sunlife. 

    If the first part focused on three private sector lenders—ICICI Bank, HDFC Bank and Axis Bank—the second set of videos seem to cast the net wider with public sector players—Punjab National Bank, Bank of Baroda, Canara Bank and Indian Bank—among the 23 named for allegedly flouting anti-money laundering and other norms. Another set of videos, focused on public sector financial sector players, is expected to be released later this week, Cobrapost's Anirudh Bahal told a press conference. 
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Cobrapost videos show widespread wrongdoing by many financial sector entities 
PSUs under lens include State Bank of India, LIC, PNB, Bank of Baroda, Canara Bank and Indian Bank 
New private players under scanner include Yes Bank, Federal Bank, Reliance Life Insurance, Tata, AIG and Birla Sunlife 
Monday's videos showed agents willing to accept cash to open bank accounts 
Also showed them claiming they could split the cash into multiple branches to avoid detection 
Some banks claim to have suspended officials and initiated probes Sting glare on Andhra min's 'guarantee' 
New Delhi: New videos released by Cobrapost on Monday showed agents and bankers willing to accept large amounts of cash, offering to open bank accounts without following knowyour-customer rules, apart from claiming that they could split the cash into multiple tranches to avoid detection and even route it through accounts of other customers for a fee. Insurance company executives boasted of managing cash transactions that ran into several lakhs. 
    In one case, Andhra Pradesh primary education minister Sailajanath Sake allegedly stood guarantee for a proposed investment in a real estate project that was to be routed through Indian Bank. Sake, however, denied the allegations. 
    "Don't use big words like money laundering in my case. I am not one who would resort to such activities. I did not know that a simple recommendation would lead to such kind of unexpected controversy," he said. 
    In Delhi, the finance ministry first responded by saying that it had asked the Indian Banks' Association, the industry lobby group, to look into the videos. By evening, it issued a statement saying chiefs of public sector banks and LIC had been asked to suspend officers, pending an enquiry. Besides, the finance ministry has asked banks to conduct an immediate enquiry and send officer-wise action-taken report. 
    The Insurance Regulatory and Development Authority (Irda) too asked companies to submit details. "The matter is under examination and appropriate action will be taken at the earliest," Irda said on its website. 
    Although the RBI did not issue an official statement, during a conference call with analysts, deputy governor K C Chakrabarty said the regulator's investigations into three private banks, which faced similar allegations, had not thrown up any irregularities. 
    "We are looking at how banks are following up on KYC norms. There are certain differences in the manner of reporting KYC norms in each bank and there is a need to strengthen KYC guidelines. 
    "The deviations that have been detected cannot be called money laundering. If the latest address is not there in the bank's books, it is not KYC compliant. But that does not make the transaction illegal," he said.