Hain writes: "Can I thank the Chancellor for ensuring the Financial Conduct Authority, the Serious Fraud Office and the National Crime Agency investigate HSBC, Standard Chartered Banks, and also can I add Baroda Bank, each of which expert South African whistle-blowers have told me must have been conduits for the corrupt proceeds of money stolen from their taxpayers and laundered through Dubai and Hong Kong".
According to the Daily Maverick, Hammond responded on September 30, saying he had referred Hain's letter to the UK's Financial Conduct Authority (FCA) and other United Kingdom law enforcement agencies, including the National Crime Agency and the serious fraud office.
The allegations relate to an ongoing scandal in South Africa, where opposition groups and investigators are accusing the Gupta brothers of buying influence with president Jacob Zuma and making money from state contracts.
Standard Chartered said, "We are not able to comment on the details of client transactions, but can confirm that after an internal investigation, accounts were closed by us by early 2014".
Meanwhile, UK authorities are also shining a spotlight on the Guptas' business activities and financial flows as the Serious Fraud Office is set to look into HSBC and Standard Chartered's exposure to the Guptas.
The Guptas and Zuma deny wrongdoing.
According to documents that appear to have been come from a Gupta company hard drive, and which have been reviewed by The Wall Street Journal, several Standard Chartered accounts were used in 2013 to transfer money between Gupta-controlled companies in South Africa and Dubai to pay for a lavish family wedding.More news: The Xbox One Fall Update is now available for download
A spokeswoman for the FCA said it was already in contact with the banks named by Lord Hain and would "consider carefully further responses received".
The Gupta family's financial dealings have now caught the attention of the Federal Bureau of Investigation (FBI), who have opened an investigation into the family. HSBC said it had no comment on the matter.
He said it has been estimated that around £400m could have been laundered through financial institutions in South Africa.
The matter is expected to be raised in the House of Lords on Thursday.
He said there have been numerous rumours that the Houston-based Gupta nephews have been laundering money for the family on USA soil.