The Finance Ministry has asked PSU banks and Life Insurance Corporation, LIC, to take immediate action against employees who appear to be advising customers on ways of violating the Know Your Customer (KYC) and other regulatory norms. In a circular, Financial Services Secretary Rajiv Takru asked heads of several state-owned banks and LIC on Monday that an inquiry must be initiated and completed expeditiously.

The circular was issued in connection with Cobrapost, Red Spider 2 Expose that was released on Monday morning indicating alleged money laundering by the financial institutions.

In its expose earlier in the day, Cobrapost has named as many as 23 public and private sector banks and insurance companies for allegedly running a nation-wide money laundering racket, blatantly violating laws of the land. They are alleged to have violated the KYC and Anti Money Laundering Guideline.

The Finance Ministry has also sought a detailed report from the financial institutions about names of erring employees, their designations and action taken against them.