Wary banks beef up internal monitoring

NEW DELHI: Banks, already under pressure to meet the surge in demand for new bank notes, has a new problem in hand.

With several cases of malpractices being reported following the government’s demonetisation move, lenders—both public and private-- are looking to put in place stringent internal monitoring mechanisms to keep a close watch on employees, and ensure that they do not indulge in malpractices.

In fact, most lenders have started circulating repeated advisories to employees, warning them of strict action in case of any discrepancy in their work ethics. In many cases, teams comprising senior officials from all departments have been assigned to look at compliance.

The finance ministry, last week, said 27 officials engaged with various public sector banks were suspended, and six were transferred to non-sensitive posts after reports of misconduct.

News agency ANI on Wednesday reported that the Enforcement Directorate (ED) had carried out raids in 50 branches of 10 banks across India, on suspicion of money laundering. The ED is keeping a tab on those account holders, who deposited huge amounts at one time, and also those which recorded suspicious transactions, the agency said, quoting sources.

Meanwhile, a few banks are also looking to hire external agencies to keep track of the transactions that take place, sources said. While HDFC has sacked four of its employees in Chandigarh, Axis Bank handed out pink slips to 19. The bank has already engaged a private firm to probe the issue.

“We have sacked employees who were found to be deviating from our code of conduct. For Axis, there is zero tolerance for any such malpractice,” Rajesh Dahiya, executive director, Axis Bank, told HT. It is an ongoing process, he added.

Two employees of Axis Bank were also arrested by the ED.

“Appropriate action will be taken against individuals involved in unauthorised activities,” the finance ministry said.