BANGALORE, March 22 (Reuters) - Reserve Bank of India
Governor Duvvuri Subbarao said on Friday there was a need for
action to prevent money laundering in the country following
recent allegations against three large private sector banks.
The RBI on Monday said it had started a probe at ICICI Bank
Ltd, HDFC Bank Ltd and Axis Bank Ltd
after an independent investigative journalist said
last week he had video evidence showing suspected money
laundering practices at their branches. The
report hit the banks' shares.
"I can't at this time say or make a broad sweeping statement
that there are no transactions taking place at all, but I
believe the system is largely safe," Subbarao said in response
to an audience question at a banking industry gathering.
"However, there is need for some corrective action. We are
going to the head offices of all those banks to check what the
system is for detecting management-level control over these
The RBI is also conducting a study of the banking system on
whether there are enough controls to prevent such incidents,
(Reporting by Harichandan Arakali, writing by Suvashree Dey
Choudhury; Editing by Tony Munroe and Patrick Graham)