Axis Bank CEO Shikha Sharma “Embarrassed” by Actions of Employees

In a note to Axis Bank customers, Sharma said the bank has taken strict action against the erring employees.

Investigations by the tax department and enforcement directorate, centered around fake bank accounts and the conduct of some of Axis Bank Ltd's employees, have left Shikha Sharma, Managing Director and Chief Executive Officer of the private lender, "embarrassed and upset".

In a note to the bank's customers, Sharma said that the bank has taken strict actions against these employees and will continue to keep a close eye on improper conduct.

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We have fallen short of your expectations because a handful of people did not follow our fully compliant and robust processes.

Shikha Sharma, Managing Director and Chief Executive Officer, Axis Bank

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She reassured customers, saying that the bank has been tracking the sudden surge in account activities and has identified the potentially suspicious accounts. "The bank has always been committed to the highest standards of operational control and continues to fully cooperate with the authorities", Sharma added.

In the note, she also sought to dispel fears and rumours about the banks fundamentals and said that its license is not under threat.

I assure you that the fundamentals of the bank, built painstakingly over the last 22 years and focused on serving its retail and corporate customers, is on a solid footing.

Shikha Sharma, Managing Director and Chief Executive Officer, Axis Bank

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Earlier this week, the Income Tax department found accounts of 20 fake companies with over Rs 60 crore deposited in them at Axis Bank's Noida branch, according to news agency ANI. The bank had flagged these and 10 other accounts to the Financial Intelligence Unit on account of suspicious transactions.

On 17 December, the Enforcement Directorate registered a money laundering case against the private lender, according to a report by news agency PTI. The case was filed by N Paswan, a customer who alleged his identity had been stolen and that forgery was used to conduct illegal transactions at the Noida branch.

While regulatory authorities continue to investigate the fake accounts with visits to the bank's branches, Axis Bank has also hired KPMG to conduct a forensic audit to strengthen its safety measures and enhance diligence, the note read.

(Originally published on Bloomberg Quint)

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