It's for Indian govt to defend retail banking licence: UBS

In the eye of a storm over Supreme Court's observation on its retail banking licence in the country, Swiss banking major UBS on Tuesday said it is for the Indian government to defend the views and reasons for granting the same.

The Supreme Court during a hearing on black money yesterday questioned the government's decision to grant licence for retail banking to UBS.

"UBS welcomes the Indian government's go-ahead to commence retail banking in India. It is for the government to defend its views and reason vis-a-vis the Indian Supreme Court," Hong Kong-based UBS spokesperson Mark Panday said.

The banking major's credentials have come under scrutiny in India, amid allegations that many Indians including stud farm owner Hasan Ali Khan has stashed away black money in the bank in Switzerland.

"UBS is doing everything within its powers to facilitate investigations by the regulators including the Enforcement Directorate (ED)," Panday said.

A bench of justices B Sudershan Reddy and S S Nijjar on Monday said the government has failed to explain why UBS, whose licence was withheld on the grounds of bank's suspect credentials, was allowed to operate in the country.

"The

Centre has been unable to answer any of the questions regarding its past actions and their implications, such as the slow pace of the investigation or about grant of licence to conduct retail banking by UBS by reversing the decision taken earlier to withhold such a licence on the ground that the said bank's credentials were suspect," the bench had observed.

In February, UBS had said it does not have any accounts of Hasan Ali Khan. Khan, the main accused in cases involving a USD 8 billion money laundering and tax evasion, is behind bars.

"The documentation supposedly corroborating such allegations is false. UBS does not have accounts for, or any assets of Khan, and has no knowledge of any of the alleged transactions referred to in the recent media reports," the bank had noted in February.

UBS had also claimed that in January 2007, following a request for information from Indian authorities, that the banking major had informed Swiss justice department that the documents purporting to be from UBS, and suggesting that Khan was holding assets with it, were forged.

Following investigation, the Swiss justice department and federal banking commission were fully satisfied that there was no basis for the allegations and it was established that documents were a forgery, UBS had claimed.