The online magazine Cobrapost.com has taken “strong exception” to the Reserve Bank of India (RBI) downplaying charges of money-laundering against three private sector banks and alleged that it was trying to mask “miserable failure” of its regulatory mechanism.

Criticising RBI Deputy Governor K.C. Chakrabarty’s statement in which he had said that there was no scam behind the alleged Cobrapost expose, the online portal’s Editor, Aniruddha Bahal, said it was a “brazen attempt” by the senior RBI official to give a clean chit to these banks – ICICI Bank, HDFC Bank and Axis Bank – even before probe into the matter was over.

“The manner in which the RBI Deputy Governor has rushed to issue the statement, even before the Central Bank could complete the inquest it has initiated into money laundering practices by the three banks, even before these banks could complete their own investigations into the alleged misdemeanour of their officials, and even before the Income Tax Department could come up with its own finding, is tantamount to be self-serving and is a brazen attempt on the part of the Deputy Governor to not only give these banks a clean chit but also mask the miserable failure of the banking regulatory mechanism of the RBI,” he said in a statement.

Refuting Mr. Chakrabarty’s statement, Mr. Bahal said for the RBI to say that there was no offence as there was “no transaction”…was a “wilful ignorance of rules and regulations supposed to be crafted and implemented by the RBI itself.” “Operation ‘Red Spider’ by Cobrapost clearly shows that the RBI and the Financial Intelligence Unit of the Finance Ministry have failed in their jobs. Perhaps the banking regulatory and supervision functions should be taken away from the RBI and a new agency created for the same,” he added. The Cobrapost through a sting operation alleged that the three top private sector banks were involved in channelling “vast amounts of black money into the regular banking system as laundered white money”. However, the banks denied the charges and ordered internal enquiries into the allegations.