RBI Denies Taking Action Against Cancelling Axis Bank’s Licence

RBI Denies Taking Action Against Cancelling Axis Bank’s Licence

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Axis Bank said it suspended 19 employees over breach in implementing exchange of high-value bank notes.
Amid rumours that India’s third biggest private sector lender- Axis Bank could lose its licence over alleged money laundering activities involving the suspended employees, the Reserve Bank of India clarified that it has not initiated any action to cancel the banking licence of Axis Bank.

“The Reserve Bank of India today 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 Specified Bank 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,” the central bank said in a statement.

Earlier in the day, Axis Bank slammed a regional newspaper report stating authorities were preparing to revoke the bank’s licence as “false and malafide”, saying it had strong systems and controls in place as per central bank rules.

Axis, India’s third-biggest private sector bank, said last week it had suspended some 19 employees over alleged breaches at one of its branches in implementing a government-ordered exchange of high-value bank notes.

The statement by Axis was in response to a report on Saturday in local Hindi daily that suggested the bank could lose its licence over alleged money laundering activities involving the suspended employees.

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

[“source-ndtv”]