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12
December 2016
The reputation of Axis Bank, the third
largest private sector lender in India, has been receiving a daily battering on
account of the large number of seizures of new currency due to the complicity
of its managers. However, things have gone beyond a loss of reputation with a
local newspaper speculating that it faced regulatory action and a
"possible revoking of its licence". Axis Bank officials have
slammed the report as 'false and malafide'. However, social media seems
to be amplifying the report. Fortunately, for the banks, the three-day holiday
has given it an opportunity to initiate corrective action and inform the public
before Tuesday. The Total Investment
& Insurance Solutions
Further, in a regulatory filing, Axis Bank
says, "...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 Reserve Bank of India (RBI). 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."
The statement by Axis Bank was in response to
a report on Saturday in local Hindi daily Dopahar that suggested the lender could lose
its licence over alleged money laundering activities involving the suspended
employees. The Total Investment &
Insurance Solutions
Meanwhile according to a report from the Economic Times, the Bank has "temporarily
suspended the accounts of some bullion dealers as part of 'enhanced due
diligence' to stamp out any attempt to legalise unaccounted wealth following
the demonetisation announced on 8th November".
Stung by accusations that its employees have
been involved in laundering black money, the lender had suspended about 19
employees over alleged breach at one of its branches. Last week, the Income Tax
Department unearthed 44 fake accounts during a raid at the Axis Bank branch in
central Delhi, where it is alleged that about Rs100 crore were deposited in
these accounts after the demonetisation announcement on 8 November 2016. The Total Investment & Insurance
Solutions
On Monday, Axis Bank closed 2.6% down at
Rs444 on BSE, while the 30-share Sensex ended the day marginally down at
26,515. The Total Investment &
Insurance Solutions
Seperately, the RBI has clarified that it had
not initiated any action against Axis Bank for cancellation of its license, as
held by some media reports, in wake of some officials found to be involved in
violative activities post-demonetisation. The Total Investment & Insurance Solutions
"The Reserve Bank of India (RBI) 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 specified bank notes in a few branches of the bank," the central bank said in a statement.The Total Investment & Insurance Solutions
"The Reserve Bank of India (RBI) 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 specified bank notes in a few branches of the bank," the central bank said in a statement.The Total Investment & Insurance Solutions
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