Realising the gravity of the situation, RBI governor Duvvuri Subbarao stressed upon a need to take steps against money laundering in India. D. Subbarao also declined to follow the lines suggested by K.C. Chakrabarty and claimed that he cannot at this time say or make a broad sweeping statement that there are no money laundering transactions taking place at all. But he believes that the system is largely safe. He also believes that there is need for some corrective action.
This is not the fist time that banks in India are on crossroads for violating the rules and regulations applicable in India. Banks in India are also openly flouting the cyber security requirements applicable to them and this is resulting in many financial frauds and criminal cases. Mobile banking cyber security in India is also in poor state of condition but still India is forcing adoption and use of mobile banking in India.
Cyber security due diligence for banks in India is still a distant dream. The insecure online banking websites and phishing attacks are resulting in loss of tremendous amount of money to bank customers. However, banks are very active in repudiating their liabilities for such losses. Fortunately, the adjudicating officer appointed by respective States of India are knowledgeable enough to held the bank liable for such financial losses.
The bottom line is that Indian banks are poor at drafting and implementing the cyber security policy. Legal issues of Internet banking in India also need to be formulated properly.
In these circumstances, the undesirable support by K.C. Chakrabarty to the accused banks, even before the result of investigation by RBI, Finance Ministry and other authorities is out, is realty unfortunate. It would also encourage banks to flout Indian regulations further as there is none to check and punish them for their wrong doings.
The evidence produced by Cobrapost sting operation is not weak evidence and that is sufficient to punish the guilty officials and banks. By releasing a sweeping statement that there are no money laundering transactions occurring in India and the evidence is not making out any civil or criminal case is premature and to a great extent childish as well.