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Axis Bank CEO apologises to customers in the wake of money laundering reports

broken piggy bank

Following media reports of some Axis Bank employees being engaged in fraudulent transactions and money laundering, managing director and CEO Shikha Sharma sent an apology to customers in an email. “Recent media reports around the conduct of a few of our employees have left me embarrassed and upset,” Sharma wrote. “We have fallen short of your expectations because a handful of people did not follow our fully compliant and robust processes,” she added.

Following the demonetization of Rs 500 and Rs 1000 notes, CNN Network 18 reported a video shows that some private bank employees are helping people who wish to launder black money by opening different accounts. The video shows an Axis Bank employee in Sonipat who is advising an undercover reporter to open multiple accounts and deposit Rs 2.5 lakh to avoid the tax radar. He further advises the undercover reporter not to use an Aadhaar card for opening the account as it can be traced by the government. Watch the video here.

Shortly after the incident, the RBI placed placed withdrawal limits on Jan Dhan accounts. Fully KYC compliant Jan Dhan account holders will be allowed to withdraw Rs 10,000 in a month while limited or non KYC compliant account holders will be permitted to withdraw Rs 5,000 per month.

“I regret that the misdeeds of a few people have eroded the hard work of 55000+ employees, who have been at the front end beyond working hours, displaying extraordinary patience and commitment to their responsibilities,” the CEO added.

The bank added that it has taken “the toughest action” against such employees and will do so in every case of divergence of its code of conduct. It added that the bank has been tracking sudden surges in account activity and have identified potentially suspicious accounts.  “This proactive identification has been one of the inputs in investigation by the regulatory authorities, who are visiting some of our branches to seek out information,” the letter further read. The bank has also hired KPMG to conduct a forensic audit “for enhanced due diligence and building more safeguards.”

RBI clarification on license

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The RBI also issued a clarification saying that it is not cancelling the licence of Axis Bank following allegations and some reports in the vernacular press. “This rumour was due to a completely misleading article that got published by a regional daily.This article was blatantly false and the daily subsequently issued a clarificatory notice,” Axis Bank added in its website.

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The email sent to customers:

Dear Customer,

On behalf of my colleagues’ at Axis Bank, I write to thank you for your support and understanding since the demonetisation initiative began. It has been a challenging time and we have tried our level best to make it easier for you.

During this period we have been overwhelmed by the care and understanding customers such as you have shown us, from bringing food for our branch staff to the instant appreciation for a job well done. We have made every effort to ease the transition by making special arrangements for senior citizens and differently abled people at our branches, using micro-ATMS to deliver cash to BSF personnel, ensuring salary disbursement to government and corporate employees across the length and breadth of our country.

Hence the recent media reports around the conduct of a few of our employees have left me embarrassed and upset. We have fallen short of your expectations because a handful of people did not follow our fully compliant and robust processes. We have taken the toughest action against such employees and we will do so in every case of divergence from our Code of Conduct. I regret that the misdeeds of a few people have eroded the hard work of 55000+ employees, who have been at the front end beyond working hours, displaying extraordinary patience and commitment to their responsibilities.

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I would like to reassure you that the bank has always been committed to the highest standards of operational control and continues to fully cooperate with the authorities. We have been tracking sudden surges in account activity and have proactively identified potentially suspicious accounts. This proactive identification has been one of the inputs in investigation by the regulatory authorities, who are visiting some of our branches to seek out information. Further, we have hired KPMG to conduct a forensic audit for enhanced due diligence and building more safeguards.

I assure you that the fundamentals of the bank, built painstakingly over the last 22 years, focused on serving its retail and corporate customers is on a solid footing. The Banker, a publication by the Financial Times, UK has ranked us amongst the safest banks in the world and we rank second in India. CRISIL the premier rating agency of the country has on December 2, 2016 reaffirmed its ratings on the banks’s existing debt instruments at ‘CRISIL AAA/Stable/CRISIL A1+”. The ratings reflect Axis Bank’s robust capitalisation, healthy resource profile and comfortable earnings.

If there is more information you seek at this time, do click here to visit this link. Also, our branch managers and relationship managers are always available to help in case of any assistance that you may require.

In closing, I am grateful for your support all through these years. We will always safeguard your interests because your trust matters the most. I look forward to your continued confidence in making us a safe, strong bank that is always focused on you.

Thanking you,
Warm regards,
Shikha Sharma
MD & CEO Axis Bank

Read the full email here

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