After unearthing leading private banks of the country, ICICI Bank, HDFC Bank and Axis Bank involvement in black money, Cobrapost editor Aniruddha Bahal did not sit idle. He went a step forward, this time investigating public sectors banks. What came out was shocking: many public sector banks were involved in money laundering, according to his sting operations.

Edited excerpt of Bahal’s interview:

You did a sting on private sector banks in March and found them to be involved in money laundering activities. But what made you to work on public sector banks, not a usual suspect in such activities?
We had done sting operations few months back but post-production process was going on. It takes a long time. We couldn’t process the whole material in one go but in batches, so we were ate in disclosing on public sector banks.

But my question is what made you investigate public sector banks?
We wanted to investigate whether money laundering is also happening in public sector banks. Our investigations which were released in March showed that it was happening in private sector banks just like that.

What triggered you investigating public sector banks? Was the financial crisis and banks involvement in parking black money?
Money laundering and black money has been in news for last so many years. There have been several movements against black money in India, not just one. It has caught public imagination for long and we thought let’s investigate what is happening in the public sector banks.

So, the public sector banks are not clean according to your investigations? What do you think of outcome now?
It is for the government to assess the situation and come with some measures. I want government to suspend licenses of branches involved in such unlawful activities. I think they must make some laws that this sort of thing doesn’t happen again.

So, do you expect any tightening of banks policy by the government? Will government take some stringent measures to ensure that such things don’t occur?
They should otherwise what era we are living in because no action has been taken and system is not set right. Money laundering is a criminal activity and enforcement directorate can only do investigations. You can’t expect banks to investigate it.

But why did you sting operations go only till general manager of banks. Why not sting operations on managing directors and chairpersons of banks? Was it a deliberate attempt?
We were going just to banks. We started investigating laundering of money posed as a relative of a fictitious politician by one of our staffers. So wherever, banks were involved we did it at the local level.

Will you do sting operations against the top echelon of banking hierarchy?
The matter is out. I don’t think now it can be done.

How did Andhra Pradesh education minister came into picture?
Sake Sailajanath, the state education minister of Andhra Pradesh, stood guarantor for the safety of black money investment of Dr. H. Prasad, an orthopedic surgeon from Tirupati in a real estate project. That’s how he came into picture.

But don’t you think that the lesser mortals of banks will be punished not the higher ones?
I hope not. I hope that top management takes lesson from this sting investigation and lot of them lose the job. Otherwise there will be no accountability to it.

You also investigated Life Insurance Company of India, country’s premier insurance giant?
The LIC controls 15 percent of India’s GDP. What LIC has done is the most shameful thing that has come out.

Is it a systemic problem of banks?
It is systemic problem and should be solved at the system level and accountable would come only if severe punishment. If we don’t punish the people involved then we will be condemned for life to a rotten system.

Were you contacted by government after your last sting?
No. not at all. Only after the March investigation, income tax office wanted some DVD. We gave them DVDs of the sting operations. And no one else from the government called me.