HSBC investigated over dodgy overseas accounts
According to Indian government sources, HSBC has been under investigation by tax authorities over the past few months, regarding allegations that some of its employees from its overseas branches opened unauthorised bank accounts to facilitate deposits of Indians overseas, thereby violating regulations. HSBC has denied the allegations.

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NEW DELHI: Tax authorities are investigating if HSBC and some of its executives from its overseas branches allegedly opened bank accounts in an unauthorised manner to facilitate deposits of Indians overseas, violating regulations.Sources in the government said that the probe has been under way for the past few months after the tax department received a tip-off. The role of executives from at least two of the bank’s foreign branches, along with officials in India, is being investigated.They further said that the revenue department has taken up the issue with the Reserve Bank, to seek the regulator’s view if HSBC had complied with the know-your-customer (KYC) guidelines as well as banking licence norms.In an e-mailed reponse to a questionnaire from TOI, an HSBC official said, “HSBC does not condone tax evasion . HSBC has no appetite for business with clients or potential clients who do not meet its financial crime compliance standards. HSBC seeks to comply with the law in all jurisdictions in which it operates.”The sources said the tax department is investigating if executives from HSBC’s foreign branches were interacting directly with Indian customers and getting them to open accounts in overseas branches. Further, they suspect that these executives were getting deposits from Indian clients for their overseas branches, some of which were allegedly in cash.“There were some frequent visits, which we are looking into. The tax officials are also checking if the executives in India were aware of these transactions,” a source said. Field offices have been asked to take up the issue with HSBC India and at least two of its foreign branches.The sources said that the government came across some information related to HSBC and subsequently received more data, which is being examined.Over 600 Indians with accounts in HSBC’s Geneva branch are already under the scanner after a “whistleblower” shared the data. In these cases, the govenrment has already filed prosecution in several cases and raised tax demands over over Rs 4,000 crore. The government has enacted a stringent black money law, which includes stiff penalties and possible jail term of up 10 years for those found with undiclosed overseas assets.In recent months, the tax authorities have been combing information related to illicit transactions, especially those related to overseas accounts after the BJP promised it as a key action point in the run up to the last general elections.