Will the licence of Axis Bank be canceled?

The Reserve Bank of India has quelled rumours that it is going to cancel the registration of Axis Bank following involvement of a few of its staffs in money laundering in the wake of demonetisation.

Axis Bank, India’s third-largest private sector lender, was in thick of news in the last few days as it had suspended 24 of its employees for allegedly breaking rules in accepting or exchanging old Rs 500 and Rs 1000 currency notes, which lost legal status since November 9.

The rumour kept senior Axis management, its shareholders and depositors on the edge for the entire day. Its share price fell 2.54% to Rs 444.80 on BSE. It all started with a regional media reporting that the bank was likely to lose its banking license.

RBI said “it has not initiated any action to cancel the banking license of Axis Bank in the wake of certain allegations about some serious irregularities in transactions relating of deposit/exchange of specified bank notes in a few branches of the bank.”

The bank snubbed the report as “false and malafide.” “The bank has a strong systems and controls as per the norms prescribed by the RBI”, it said in a filing to stock exchanges. “The bank has a strong code of conduct with zero tolerance to any deviation from prescribed processes.”

The suspended employees are from different parts of the country including Odisha, West Bengal and Tamil Nadu. Six of them are from Delhi.

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