After a series of irregularities in exchange of old notes were detected at Axis Bank, the government has asked the country's third biggest private lender to "set its house in order", a leading English daily has reported.
"The message has been conveyed to them," said a government official, who did not wish to be identified. "This is a matter of serious concern," the official said.
The government agencies will now detect the trail left by cash deposited in some accounts, he said.
However, the Axis Bank sources, have denied receiving any such communication from the government.
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"Like other banks, we are interacting with RBI, ED and the tax department almost on a daily basis and cooperating with them. We have not received any communication or there has been no conversation around this," said a senior bank executive.
The bank had last week suspended 16 employees following action by the Enforcement Directorate. Two mangers of the bank were also arrested.