Axis Bank sacks 24 employees, suspends 50 accounts in demonetisation drill

Prime Minister Narendra Modi's note ban policy seems to have hit Axis Bank the hardest as the country's third-largest private sector lender had to suspend 50 accounts and sack 24 employees ever since the 8 November announcement scrapping all then existing Rs500 and Rs1,000 currency notes.

Axis Bank acted after raids by the Income Tax Department on select branches of the bank and revelations of instances of involvement of its employees in helping individuals convert black money to white money.

On Thursday, IT officials reportedly raided the Axis Bank branch of Noida Sector 51 and seized Rs60 crore in about 20 fake accounts.

With the case involving its Noida branch and disclosures of transgressions in its network, Axis Bank has so far suspended 50 accounts and 24 employees for suspicious activities.

The bank, however, says the investigating agencies have acted on tip-offs provided by the bank itself, even as it admitted that the adverse publicity was affecting its brand, but hoped it would be temporary.

Rajiv Anand, head of Axis Bank's retail banking division, said so far the investigating agencies had visited eight branches, including five in New Delhi, and the number of employees suspended has gone up to 24 from 19 last week.

On the Noida branch scam, the bank said I-T officials ''visited'' the branch asking for details of 30 accounts, following a trail of Rs600 crore deposit by a jeweller.

The official said all the accounts are KYC-compliant, but the problem arises when account-holders do suspicious transactions or those involving shell companies.

"It is not that Axis Bank is under the scanner, but the person doing the transaction with us is," he said, adding at no point it has been asked to shut any branch.

The suspension of account is temporary and the bank carries out extra due diligence, including a visit to account holder's address in some cases, he said.

The bank refused to share details of amounts transacted in the suspicious accounts, but Anand conceded that a bulk of the affected accounts are in the bullion trade. Axis Bank is the largest domestic lender in the bullion import space.