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8 months ago
India's central bank says no move to cancel Axis Bank license
December 12, 2016 / 9:28 AM / 8 months ago

India's central bank says no move to cancel Axis Bank license

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A man leaves an Axis Bank automated teller machine (ATM) in New Delhi, India, October 20, 2016.Adnan Abidi

MUMBAI (Reuters) - The Reserve Bank of India on Monday denied a media report that authorities were preparing to cancel the license of Axis Bank Ltd (AXBK.NS) over irregularities in transactions relating to the exchange of high-value bank notes.

"The clarification comes in the background of rumors in a segment of the media that the bank was likely to lose its banking license," the RBI said in a statement.

Indian Prime Minister Narendra Modi announced last month that 500-rupee and 1,000-rupee bank notes worth a total of 15.44 trillion rupees ($229 billion) were to be scrapped in a bid to crack down on the shadow or "black" economy and prevent counterfeiting.

People have scrambled to exchange and deposit the old bank notes since then, leading to long queues at banks. Tax officials and law enforcement agencies have in some cases unearthed cases of malpractice and a breach of rules.

Axis Bank, the country's third-biggest private sector lender by assets, earlier on Monday dismissed a report in local Hindi newspaper Dopahar that suggested the bank could lose its license over alleged money laundering activities, calling it "false and malafide".

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

Axis Bank, which says it has suspended 24 employees so far over alleged wrongdoing, has appointed KPMG to conduct a forensic audit. Senior bank officials were also conducting a parallel probe, it said last week.

Shares in Axis closed 2.5 percent lower at 445.10 rupees a share in a Mumbai market that fell 1.1 percent.

Reporting by Devidutta Tripathy; Editing by Tom Hogue, Greg Mahlich

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