Cobrapost slams RBI clean chit to money laundering scam

Whistle-blowing website Cobrapost.com on Saturday slammed the clean chit given by the Reserve Bank of India to the money-laundering practices exposed by it in ICICI Bank, HDFC Bank and Axis Bank.

The website had revealed how the top private banks in India helped encouraged money laundering by helping traders convert black money to white.

The website specially criticised RBI Deputy Governor K C Chakrabarty, who had stated on Thursday, “There is no scam (that) has happened as no transaction has taken place. Let us not unnecessarily downgrade ourselves. Our system to prevent money laundering is perfect, absolutely nothing (wrong with it).”

A press statement issued by the website stated, "The manner in which the RBI deputy governor has rushed to issue the statement, even before the Central Bank could complete the inquest it has initiated into money laundering practices by the three banks, even before these banks could complete their own investigations into the alleged misdemeanour of their officials, and even before the Income Tax Department could come up with its own finding, is tantamount to be self-serving and is a brazen attempt on the part of the Deputy Governor to not only give these banks a clean chit but also mask the miserable failure of the banking regulatory mechanism of the RBI. One gets the impression that the RBI deputy governor has taken upon himself to become the spokesperson of the three banks concerned".

It added, "For the RBI to say that there is no offence as there was 'no transaction' is a very novice reading of the law and a wilful ignorance of rules and regulations supposed to be crafted and implemented by the RBI itself".

Read the press statement here