Axis Bank: Axis of Money Laundering

A pan-India undercover investigation by Cobrapost finds Axis Bank is engaged in money laundering, flagrantly violating various RBI guidelines, the provisions of the Prevention of Money Laundering Act, the Income Tax Act, and KYC norms, making the vast assets it manages, the spectacular growth it has achieved and the profits it is raking in all look questionable

It only needed a simple visit to the bank with as simple a proposition: A politician wants to invest his tainted crores. The purpose: Make the money clean. Would the bankers help? And the veneer came unstuck.

Codenamed Operation Red Spider, a six-month long undercover investigation by Cobrapost found almost all Axis Bank officials going overboard in helping our reporter, posing as a relative of an imagined politician, invest black money in various products of the bank to make it “white.” In their zeal to net the customer with deep pockets, bankers in branches of Axis Banks spread across several states, including Rajasthan, Haryana, Delhi, Uttar Pradesh, Andhra Pradesh and West Bengal, suggested innumerable ways to convert black money into white: invest in insurance, invest in gold, deposit the cash in bank’s account, split the cash in smaller chunks to avoid detection, open multiple accounts, and the likes. All these ways serve the purpose of the client well, fully covering the tracks so much so that government regulatory authorities would never get a whiff of such dubious transactions.

The modus operandi the bank officials revealed constitute the following:
* Open an account to route the cash into the Bank’s spread of products including insurance;
* Put the cash in accounts other than bona fide, like dummy accounts;
* Use sundry accounts of the bank to deposit illegal cash and get the pay orders for investment;
* Do it even without PAN card;
* Use provisions like Form 60 to deposit the illegitimate cash into the account to route it into investment;
* Get Demand Drafts made for the client even from other banks to facilitate investment;
* Split the money to invest in diversified portfolio including gold;
* Allot lockers for safe keeping the illegitimate cash;
* Show the illegal cash as proceeds from some sham agreements of land sale;
* Use duplicate PAN cards to route the cash transactions into investment;
* Send money abroad through NRE/NRO accounts; transfer cash using accounts of customers, for a fee; use some shell company to transfer money abroad showing it as expenses toward business-cum-leisure trip; transfer money using TCDC cards.

The bankers would go out of their way to help you provided you have crores to show them, never mind if they have been earned by means other than legitimate, and they will help you make it legitimate, in a foolproof manner, taking advantages of certain loopholes of the system. For instance, they are using the provision of scrutiny of investments up to a period of 7 years to beat the system. Then there are provisions like Section 10-10(D) which come in handy to people invest black money and make it white.

All such acts of commissions, however, comprise an offence under various laws of the land, like the Income Tax Act, the Prevention of Money Laundering Act, punishable by imprisonment, and various RBI guidelines including KYC norms. Although KYC norms make it mandatory for bankers to report any dubious transactions to enforcement authorities in, the brazenness with which they are conducting their business bring a stark reality to the fore: The regulatory authorities have miserably failed to monitor their activities let alone bring them to book.
Beginning its operations in 1994, Axis Bank, known as UTI Bank in its earlier avatar, has emerged as the third largest private bank, with 1987 domestic branches and a presence in seven countries, in barely two decades of its existence. It boasts of a network of 10,363 ATMs spread across the country. According to the information available on its websites, the banks had assets worth Rs. 285,627.79 crore in 2012, a 31.28 per cent increase since 2005. The bank has registered a similar spurt in its profits which grew by 45.12 per cent to a staggering figure of 4,242.21 crore in the same period. It is undoubtedly a phenomenal growth.

However, the revelations made by the Axis Bank officials, caught on camera by our Associate Editor Syed Masroor Hasan, during the course of Operation Red Spider make its deposits, its profits and its growth look dubious, so do the means employed to achieve them. It also brings forth the fact that the top brass of the bank is involved in money laundering.

The encounters the Cobrapost journalist, Syed Masroor Hasan, had with the bank officials are listed in the following case studies.






Disclaimer
Viewers are advised that we have omitted the first names of the banking officials for security reasons. We are using their initials with their surnames wherever possible. For the same reason, we are avoiding, to the best of our ability, the actual location of the bank branches, such as road, number etc., preferring instead to identify them generically, such as South Delhi, West Delhi and the like.
Viewers are also advised that the videos have been transcribed to the best of our ability. Transcribing is painstaking and error-prone work. It involves hearing and typing. In case of any error, the video, along with the audio, should be referred to.
Viewers are further advised that Hindi text has been translated to English to the best of our ability. We thought summarizing each of our encounters with the banking officials in English would be useful to our print journalists and readers. These summarizations have also been done to the best of our ability. However, translations can sometimes be subjective, as sometimes, different phrases can have different meanings.
Errors, if any, in transcribing and translation, are purely bonafide and unintentional.
It should be remembered that subtitles are only an aid to the viewing process.
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