After exposing alleged role of some of the biggest private sector banks in money laundering, Aniruddha Bahal of cobrapost.com has now stung 23 financial institutions, including big public sector banks like the State Bank of India and Punjab National Bank and financial institutions like the LIC, with similar charges.

In an expose — the sting operation has been christened Red Spider Part 2 — made public on Monday morning, Bahal accused Andhra Pradesh education minister S Sailajanath of guaranteeing the money laundering deal. He alleged that these financial institutions accept a huge amount of unaccounted-for cash, then split the money to make insurance deposits in multiple accounts.

In an effort to zoom in on the depth of alleged corruption, Bahal said that some banks operating from Parliament Street, sitting next door to both parliament and the Reserve Bank of India, are also involved. He claimed that the Parliament Street branches of HDFC, ICICI, Bank of Baroda, Allahabad Bank and central Bank of India are involved in money laundering.

Also read: our interview with Bahal after cobrapost’s first sting op, where he says, “I didn’t waste time (selling banking sting to channels)”

Besides SBI and PNB, the other banks named by cobrapost.com in money laundering are Indian bank, IDBI, Bank of Baroda, Canara bank, Oriental bank of Commerce, central Bank. These aside, private banks such as ICICI, HDFC, Dhanlaxmi Bank, Yes Bank, Axis Bank, Federal Bank and DCB Bank have also been accused of “investing” money laundering.

The website’s investigations were conducted for over six months in states like Delhi, Uttar Pradesh, Rajasthan, Haryana, Andhra Pradesh and Karnataka, among others.

The newest round of sting expose has revealed violation of provisions of Income Tax Act, FEMA, RBI regulations, KYC norms, the Banking Act, Bahal said at a media conference on Monday morning. “The revelations amount to crystal clear offenses under IPC and the PMLA (prevention of money laundering act),” he alleged.

Cobrapost also named insurance companies, including LIC, Tata AIG, Birla Sun Life, and Reliance Life Insurance, as launderers of black money.

According to cobrapost, “Money laundering practices are part and parcel of banking and insurance business across the board; even a walk-in customer can avail of such services that help him launder all his unaccounted cash; (and) money laundering services are being offered openly as a standard product across the board”.

But the “cover-up”, the website says, is “even more shocking”. It says: “Given (finance minister) P Chidambaram’s repeated warnings to money launderers and tax evaders that ‘we are watching you and will come after you’, till date, no investigative agency has launched any investigation into the heaps of evidence submitted by Cobrapost. Why is the FM himself overeager to declare innocence on part of the banks, as he did on March 14?

"Has the FM (or the RBI for that matter) not read the PMLA (?prevention of money laundering act)?”

In a statement issued on the occasion, the website says, “Operation Red Spider 2 establishes beyond doubt that money laundering is not confined to private banks, and is not an aberration, as is being made out in certain quarters in the wake of the first expose on March 14 in which HDFC Bank, ICICI Bank and Axis Bank were shown involved in money laundering.… It (money laundering) is rather endemic overarching the entire banking system and insurance sector, without exception, however shocking it might be. The scale is vast and unfathomable.”

Read the whole media statement, including what the website says some “selected bytes” culled out to show “how money laundering is a standard practice across the banking and insurance sector”. Click below: