Money & Banking

No move to cancel Axis Bank licence over alleged irregularities in currency swap: RBI

Our Bureau MUMBAI | Updated on January 16, 2018 Published on December 12, 2016

axis bank

We have strong systems and controls as per the norms prescribed by the RBI: Axis Bank

The Reserve Bank of India on Monday clarified that it has not initiated any action to cancel the banking licence of Axis Bank in the wake of certain allegations about some serious irregularities in transactions relating to deposit/exchange of old ₹500 and ₹1,000 notes in a few branches of the bank.

The clarification comes in the background of rumours in a segment of the media that the bank was likely to lose its banking licence.

On its part, the private sector bank, referring to an article in a regional publication, which alleged that the central bank is considering regulatory action against it, said the news was false and mala fide. “In this connection, we strongly deny the contents of the said article and we reiterate that the bank has strong systems and controls as per the norms prescribed by the RBI.

Spreading panic

“We firmly believe that the said news is intended to spread panic amongst the general public, demoralise the staff and damage the reputation of the bank,” Axis Bank said in a notice to the stock exchanges.

According to agency reports, the Income Tax Department on Friday conducted a survey at the private sector bank’s branch in Delhi in connection with its probe into possible tax evasion by way of illegal exchange of demonetised currency notes.

Officials said taxmen visited the bank’s branch in Chandni Chowk area of Delhi and found that huge sums were deposited in multiple accounts post-November 8, when Prime Minister Narendra Modi announced the demonetisation of ₹500 and ₹1,000 notes, said the report.

“The Department is checking the records of the bank as part of a survey operation. There are some instances under scanner where huge deposits have been made post the currency scrap and that is being probed,” an official said. Axis Bank said it is cooperating with the agency.

The officials, according to agency reports, added that the taxmen were probing certain accounts which were dubious as these were opened by allegedly using fake Know Your Customer (KYC) documents and it was suspected that some entry operators used the accounts to deposit funds. The amount under scanner is understood to be around ₹100 crore, they said.

The Axis Bank scrip closed at ₹444.60 apiece, down 2.56 per cent over the previous close, on the BSE.

Published on December 12, 2016

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