Regulators have blocked UBS's application for a banking licence in India as the country's Finance Ministry probes an alleged $8 billion (£4 billion) money laundering racket that it says was masterminded by a high-profile Indian stud farm owner.
The Reserve Bank of India said that preliminary approval for a much sought-after Indian branch licence that was granted to UBS last year has now been "put on hold" pending an investigation.
It is understood that India's Finance Ministry is behind the move and blocked UBS because of what it regards as the bank's lack of co-operation in a probe of alleged money laundering by Hasan Ali Khan, a controversial businessman best known in India for his stud farm in Pune, near Bombay.
"There is a political imperative to bring Mr Khan to book," one source close to the process said.
UBS's application for a banking licence in India blocked
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