NEW DELHI (AFP) - India's second-largest bank by assets, ICICI, said on Saturday it suspended 18 employees in a probe into possible money laundering after a media sting targeting leading private lenders.

Online Indian news outlet CobraPost said earlier this week one of its reporters posed as a customer at three top private banks - ICICI, HDFC and Axis - seeking advice on investing up to US$2.8 million (S$3.5 million). The news outlet said the reporter used a hidden camera to record dozens of conversations with bank employees, which it posted on its website.

ICICI suspended 18 employees, it said in a statement, as it investigated the allegations that employees offered advice on concealing funds from the tax authorities. HDFC said separately it appointed accounting and audit firm Deloitte Touche Tohmatsu India to conduct an inquiry into allegations that some of its officials were ready to facilitiate money laundering activities. Axis, meanwhile, has launched an internal inquiry into the accusations.

The footage, shot in so-called Operation Red Spider, was said to show executives of the three banks agreeing to take cash from the undercover reporter, but no money actually changed hands.

India's finance ministry and central bank are already looking into allegations of money laundering by private sector lenders.

The issue of so-called black money - funds not reported to the government for tax purposes or parked abroad to avoid tax - is one of the issues that has roiled Prime Minister Manmohan Singh's scandal-tainted administration.