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ICICI, HDFC Bank direct staff not to push insurance products

These banks have verbally requested staff in many of their branches not to pursue sale of insurance voluntarily till the dust settles on the cobrapost.com sting operations

May 20, 2013 1:34 IST | India Infoline News Service
Private lenders—ICICI Bank and HDFC Bank—have ordered their staff not to push for sale of insurance products that are seen as the main means used by customers to avoid taxes and legitimise ill-gotten wealth, according to a media report.

These banks have verbally requested staff in many of their branches not to pursue sale of insurance voluntarily till the dust settles on the cobrapost.com sting operations, the report added.

In early May, Cobrapost alleged that around 23 private and PSU banks were involved in money laundering. Among the banks accused in money laundering included SBI, IDBI, OBC, Dena Bank, IOB, Yes Bank, Dhanlaxmi Bank, PNB, ICICI Bank, Axis Bank, Canara and BoB.

The online portal Cobrapost alleged that there was violation on PMLA (Prevention of Money laundering Act), KYC (know your customer) and banking norms.

An investigation conducted by the Reserve Bank of India (RBI) into three private lenders—ICICI Bank, HDFC Bank and Axis Bank—revealed that they may not have been involved in money laundering “in the strictest sense” but there could be instances of tax evasion.

These banks also breached compliance with critical know-your customer (KYC) norms, the RBI said.

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