Official clears Indian banks of money-laundering

A senior Indian central bank official cleared three private banks of money-laundering on Thursday after an undercover media investigation led to the suspension of dozens of their employees.

The Reserve Bank of India announced that it would investigate the three banks -- ICICI, HDFC and Axis -- following an apparent sting by a reporter who had posed as a customer and sought advice on how to invest cash by circumventing existing banking laws designed to safeguard against money-laundering.

Although the RBI's investigation is not scheduled to issue its final report until the end of the month, the central bank's deputy governor told reporters that there was no evidence of any wrongdoing.

"There is not a single transaction which has taken place," said K.C. Chakrabarty, speaking in Mumbai.

"There is no scam (that) has happened ... as no transaction has taken place," Chakrabarty added.

"It has nothing to do with money-laundering."

The RBI investigation was launched after a reporter for the online Cobrapost news outlet used a hidden camera to record dozens of conversations with bank employees, which were then posted on its website.

The video shows some executives from the banks agreeing to help him with his investment plans, but no money actually exchanged hands.

HDFC and ICICI Bank have already suspended dozens of its employees who were shown in the video, while Axis has launched an internal inquiry.