The Reserve Bank today sought to downplay the money-laundering allegations against three private sector banks, saying the country has a "perfect" system to prevent such offences and that not a single such transaction took place in the sting operation.

The country's three largest private banks -- ICICI bank, HDFC Bank and Axis Bank -- were last week accused of indulging in money laundering both within and outside with an online portal, Cobrapost, claiming that the sting operation conducted by it had revealed a scam.

"Allegations do not mean flouting norms. There is not a single transaction which has taken place. KYC violations will happen in any system. These are all transactional issues and have nothing to do with money laundering," Deputy Governor KC Chakrabarty told reporters after a meeting with bankers here.

He was responding to a question on the issue.

The senior most Deputy Governor further said, "there is no scam (that) has happened...As no transaction has taken place."

"Let us not unnecessarily downgrade ourself. Our system to prevent money laundering is perfect, absolutely nothing (wrong with it)," he said.

Chakrabarty also said RBI will further tighten the anti-money laundering norms if needed. "If we find there is a need to further tighten any guidelines, we'll do that."

The comments come even as the RBI, Finance Ministry and the banks concerned are probing the allegations that some officials of these banks offered to facilitate money laundering.

On March 14, Cobrapost had released the contents of purported video recording of officials of HDFC, ICICI and Axis Bank allegedly agreeing to receive unverified sums of cash and put them in their investment schemes and benami accounts in violation of anti-money laundering laws.

Following the allegations, the banks had also suspended some employees in question.

RBI has also initiated scrutiny of the three banks for alleged violation of KYC guidelines. It has said final reports will be completed by March 31 and thereafter further course of action as necessary will be initiated.

The footage, taken in 'Operation Red Spider', purportedly showed some executives of the three banks verbally agreeing to take huge amounts of cash from the undercover reporter and putting them into a variety of long-term investment plans so that the black money ultimately is converted into white.

Meanwhile, Chakrabarty admitted that some people may not be paying taxes and some such money flows into the system.

"We have given sufficient instructions to banks (about) how to avoid this. Our people have gone for scrutinising, not only these three banks, but we do it for all other banks," he said.

He also sought to distinguish between money laundering and black money, saying they were two different things.

On the likelihood of other irregularities like flouting of KYC norms and suspicious transactions, he said there are sufficient guidelines to prevent them and banks are following them.

"All our successive FSR (financial stability report) are highlighting that we have serious concern over bank branches selling gold coins, mutual fund products, insurance...It involves multiple regulators, it involves KYC (Know Your Customer) requirements.

"We are going for a large scale financial inclusion drive, if we make KYC too stringent, then banks will not open the accounts," Chakrabarty said.

"You don't need a sting operation to show that in this country, people have black money. Some black money remains in bank accounts, for that do you require to have a sting operation?" he said.

Stating that the country has good rules and regulations, he said some stray incidents or allegations don't make India's system bad. "We don't make it as a systemic issue," he added.

When asked as to what action RBI could take to prevent recurrence of such allegations, Chakrabarty said, "we cannot take action based on allegations, (only) if we find something (wrong) we can act upon...Our supervisory process is very effective, if we find that something is wrong, we will always take action," Chakrabarty said.

"What we are saying is that when multiple regulators are concerned, when banks are selling other products, there may be some area where you need to strengthen, we will definitely examine that," he said.

Chakrabarty was talking to the media after a meeting, chaired by Governor D Subbarao, with bankers on the migration to a new risk-based supervision system.

However, the said the meeting with the bankers had nothing to do with the recent Cobrapost expose as it was arranged in advance.

ICICI Bank Managing Director and Chief Executive Chanda Kochhar, who was at the meeting, said, "we have clarified on all the steps that have been taken, including internal enquiry and appointment of Deloitte...I think we will then speak again when the reports are out."

She added the preliminary report from the auditing firm will be out before March 31.

However, the heads of the other two banks named in the expose, Aditya Puri of HDFC Bank and Shikha Sharma of Axis Bank, refused to comment.

It could not be ascertained whether the alleged money laundering issue by these three banks was discussed at the meeting between the RBI brass and the top bankers.

When sought his views on the likely impact of these allegations on the process of issuing new bank licences, Chakrabarty jokingly remarked, "people may be more reluctant to apply for a new bank licence with so many problems... The media people are so active, so let us not open (new) banks."