Notwithstanding money laundering allegation, insurance behemoth Life Insurance Corporation (LIC) bought 5.83 lakh shares of Axis Bank at an average price of Rs 1,333.6 on Friday, it was revealed today.
LIC increased its stake in Axis Bank to 8.862 per cent from 8.742 per cent through open market purchases, the Bank said in a notice to the exchanges.
LIC spent Rs 77.76 crore for the purchase that works out to an average price of 1,333.6 a share.
Axis Bank along with ICICI Bank and HDFC Bank was accused by online magazine Cobrapost.com on Thursday that their executives at some branches and insurance affiliates had offered to convert politicians’ black money (or tax-evaded income) into white (legitimate income).
According to Cobrapost, the branches open an account to route the cash into various investment schemes of the bank. They do so without the mandatory permanent account number or adhering to the know-your-customer norms laid down by the RBI.
The branches help clients transfer money abroad through non-resident external/non-resident ordinary account. They also recommend to clients to split the black money into tranches to get it into the banking system without being detected, the magazine alleged.
“The bank branches use ‘benami’ (fictitious names or in relatives/ friends/ associates names) to facilitate the conversion of black money. They also use the accounts of other customers to channel the black money into the system for a fee,” Cobrapost said in its statement.
Shares of Axis Bank ended down 0.20 per cent at Rs 1,322.15 today on the BSE.