Indian banks probe alleged money laundering

India's second-largest bank by assets, ICICI, said Saturday it has suspended 18 employees in a probe into possible money laundering after a media sting targeting leading private lenders. Online Indian news outlet CobraPost said earlier this week one of its reporters had posed as a customer at three top private banks -- ICICI, HDFC and Axis -- seeking advice on investing up to $2.8 million. The news outlet said the reporter used a hidden camera to record dozens of conversations with bank employees, which it posted on its website. ICICI has suspended 18 employees, it said in a statement, as it investigated the allegations that employees offered advice on concealing funds from tax authorities. "ICICI group conducts its business with the highest level of compliance to legal and regulatory requirements," the bank said. HDFC said separately it has appointed accounting and audit firm Deloitte Touche Tohmatsu India to conduct an inquiry into allegations that some of its officials were ready to facilitiate money laundering activities. Axis meanwhile has launched an internal inquiry into the accusations, local media reported. The footage shot in so-called "Operation Red Spider" was said to show executives of the three banks agreeing to take cash from the undercover reporter, but no money actually changed hands. India's finance ministry and central bank are already looking into allegations of money laundering by private sector lenders. The issue of so-called "black money" -- funds not reported to the government for tax purposes or parked abroad to avoid tax -- is one of the issues that has roiled Prime Minister Manmohan Singh's scandal-tainted administration.