Why bank stocks bled? Research reveals suspicious transactions

NEW DELHI: Investors dumped bank stocks on Monday after a report said almost all Indian banks were involved in a number of suspicious transactions between 2010 and 2017. Nifty Bank plunged 3.36 per cent dragged most by IndusInd Bank, which fell 8.55 per cent to Rs 560.80. The private bank was allegedly involved in most of the suspicious transactions, ICIJ report shows. Bandhan Bank, RBL Bank, PNB, IDFC First Bank and Bank of Baroda were among other top losers from the index.

Nifty Private Bank plunged 3.71 per cent and Nifty PSU Bank 4.39 per cent. Public sector banks were further pressured by RBI’s statement that said these banks reported frauds worth over Rs 19,964 crore in total 2,867 cases during the April-June quarter of the ongoing fiscal year.

The International Consortium of Investigative Journalism (ICIJ) obtained a top-secret Suspicious Activity Reports or SARs prepared by Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which mentions these transactions.

In the order of the number of dubious transactions, ICJI has named these Indian banks in its reports: IndusInd Bank, Canara Bank, Bank of India, SBI, Axis Bank, Allahabad Bank, ICICI Bank, Indian Overseas Bank, Deutsche Bank, HDFC Bank, Bank of Maharashtra, Kotak Mahindra Bank, Karur Vysya Bank, Union Bank of India, State Bank of Patiala, HSBC, RBS Bank, YES Bank, Bank of Baroda, Uco Bank, Karnataka Bank, Tamil and Mercantile Bank, Standard Chartered Bank, Indian Bank, Andhra Bank, Vijaya Bank and Credit Bank.

These banks, in total 406 transactions, sent $406,278,962 and received $482,181,226.

ICIJ has also named a number of foreign banks. Shares of banks across the globe tanked following this explosive report. HSBC plunged to its 25-year lows in Hong Kong trading.