It is the responsibility of the government and tax authorities to check money laundering, the Reserve Bank of India (RBI) said.

RBI Governor D Subbarao said that banks neither the central bank nor individual banks were directly responsible to inquire about the source of income.

Speaking on the topic, Subbarao said, "RBI is not directly involved... Even banks are not directly responsible. They are not expected to inquire about the source of income. It is for government and tax authorities to check money laundering."

Subbarao was addressing students & academicians at an event organized as part of the Jammu & Kashmir Bank's platinum jubilee celebration.

Subbarao's comments followed Cobrapost's sting operation report that exposed senior officials of 23 private and public sector banks as well as insurance companies actively involved in money laundering.

The banks and insurances companies named in the scandal includes State Bank of India (SBI), Bank of Baroda, PNB, Canara Bank, Indian Bank, Yes Bank, IDBI Bank, Birla Sunlife, Reliance Capital and Life Insurance Corporation (LIC).

Cobrapost also indicated that it was skeptical that the RBI would take a tough stand against the banks involved in money laundering.