New Delhi, July 19: The alleged violation of safety compliance by HSBC's staff in India against money laundering and terror financing is a "serious matter" and the authorities will get to the bottom of it, home secretary R.K. Singh said today.
The RBI is studying the issue as a regulatory matter, D.K. Mittal, secretary in the department of financial services, said.
India will probe the transfer of funds by HSBC to an al Qaeda-linked bank in Saudi Arabia and its dealings with Bangladesh's Islami Bank Bangladesh Limited and Social Islami Bank Limited, who are suspected of funding terrorist groups with India links.
Singh has asked India's ambassador to the US Nirupama Rao to be in touch with the American authorities and seek additional information from Washington on the probe by the US Senate's Permanent Subcommittee on Investigations.
The subcommittee found that HSBC's anti-money laundering compliance department, which included employees in India, was inadequately staffed.
"I think this is a very serious matter and we will get to the bottom of it. We need to get some more information from the Americans, we will get that very soon. This has been worrying us," Singh told reporters on Thursday on the sidelines of the launch of the ministry of home affairs' thrift and credit society website.
He was reacting to reports that HSBC's India staff are under scanner for deficiencies in their role as "offshore reviewers" of the global bank's compliance to safety mechanism against money laundering and terror financing.
The home secretary said terrorists were using new methods to carry out money laundering to fund their activities, and the security agencies had to resort to new strategies to catch them.
The financial intelligence unit is looking into the matter, he added.
"Any financial institution that does not follow the international guidelines set by the financial action task force makes the entire world vulnerable," Singh said.
