Some truth in Cobrapost expose, will take action: Subbarao

There is 'some truth' in Cobrapost's allegations of wrong doings by banks and RBI has issued notices to their managements, central bank Governor D Subbarao said on Thursday.

"We have done study of those banks, investigated them ... We have done a larger study of those banks and we have issued notices to the bank managements and shall take appropriate actions," Subbarao said at a question answer session during the R L Sanghvi Endowment AMA Annual Lecture on Economics in Ahmedabad.

RBI had launched the investigation into the working of banks following the expose which showed some bankers giving suggestions to customers on ways to bypass regulatory norms.

The first expose had named ICICI Bank, Axis Bank and HDFC Bank. Later 23 public and private sector banks and insurance companies figured in the expose relating to money laundering.

"I am not saying that everything that has been exposed just happened . . . there is some truth to it. We will assess what went wrong, how much went wrong. We shall take action," the Governor said.

However, Subbarao added that banks cannot be held responsible for money laundering as it is not their job to find out the source of the money being deposited.

"Of course, if there are some suspicious transactions, if there are cash transactions there are norms and systems to report. They are suppose to report. . .and if they don't we shall take action against the banks," he said.

Apart from RBI, the Finance Ministry as well as the insurance regulator IRDA too are looking into the allegations levelled by the online portal.

Image: D Subbarao