India's finance ministry said on Saturday it is probing allegations by anti-graft activists that some of India's top businessmen illegally stashed large sums of money abroad.

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"Investigations in the matter (are) under progress including with foreign tax authorities to obtain more information with regard to the reported account holders," the ministry said in a statement.

India Against Corruption activist Arvind Kejriwal and Supreme Court lawyer Prashant Bhushan alleged on Friday that the government had received the names of 700 people with Geneva bank accounts from the French government in July 2011.

They alleged India's Income Tax Department raided some smaller businessmen but the "big fish" evaded penalties after "buying peace" with then finance minister Pranab Mukherjee, now India's president.

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 problems that has roiled Prime Minister Manmohan Singh's scandal-tainted administration.

India's Supreme Court last year ordered a probe into undeclared money in foreign bank accounts, while accusing the government of "serious lapses" in handling the issue.

On Friday, Indian conglomerate Reliance Industries Ltd issued a statement saying it has dealings with global banks as part of its international business operations but denying it has "any illegitimate accounts anywhere in the world".

India Against Corruption has accused the government of "misleading Parliament and shielding big names" and demanded that all the names on the list be raided by tax authorities.

The ruling Congress party has rejected Kejriwal's charges and said the government has already taken a number of steps against "black money".