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Mar 15, 2013 at 08:54pm IST

Money laundering by banks: Kotak Mahindra denies allegations

New Delhi: After CNN-IBN accessed a confidential government investigation report which highlighted how several private banks were involved in conversion of black money into white, Kotak Mahindra Bank has refuted all the allegations. "We wish to clarify that no such transactions by the alleged person have been routed via Kotak Mahindra Bank," said the Kotak Mahindra group spokesperson on Friday evening.

The government investigation report showed that the probe focussed on a Delhi-based middleman named Abdul Munaf Khan, who allegedly deposited cash to the tune of Rs 100 crore in various instalments in private banks like HDFC Bank, ING VYSA Bank, ICICI Bank and Kotak Mahindra Bank.

ALSO SEE Govt officials were informed of money laundering in banks: Report

The report, prepared in 2011, was sent to all top government officials including then Finance Minister, the Home Minister, the National Security Advisor and the Directors of the CBI, the ED and the RBI. The detailed report also gives specific instances of Munaf investing Rs 100 crore of cash in six months between January and June 2011.

Money laundering by banks: Kotak Mahindra denies allegations

"We wish to clarify that no such transactions by the alleged person have been routed via Kotak Mahindra Bank," the bank clarified.

Munaf was picked up by the CBI but released later and the investigation wasn't even completed. The lack of action on this report raises some big questions that the government must answer:

- Why did the government not act on the basis of this report if it was available since 2011?

- Why did the CBI let off the the middleman Munaf without ascertaining whose cash was he really handling?

- Why wasn't any attempt made to seek explanation from any of the banks whose names were mentioned in the government's own investigation?

A sting operation conducted by online magazine Cobrapost across various branches of private financial institutions had revealed how bank employees are accepting black money from customers to convert them into white money. Cobrapost claims that the nationwide operation shows how private banking and insurance affiliates launder money as part of standard procedures.

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