Pakistani pacer Mohammad Asif called Australian all-rounder Shane Watson a "bloody white" during the team's tour Down Under.
Raquib told a inquiry panel probing the disastrous tour that Asif narrowly escaped getting into another controversy after he directed racist remarks against Watson during a Test match.
"On the second day of the Test, Asif called Watson a 'bloody white'," Raquib is heard saying in a leaked video recording of the inquiry committee proceedings.
"In the evening Australian manager Steve Bernard contacted me and informed me that captain Ricky Ponting planned to hold a press conference. I reminded him that under ICC code of conduct such matters could not be discussed in public," Raquib told the committee members.
He said he kept the whole incident confidential as it would have created more problems for Pakistan cricket and Asif as the Australians could have gone after the player for making what they felt was a racist remark.
"You tell me what sort of comment is this. Thankfully Steve (Bernard) was cooperative after I reminded him that the series was being played in good spirit and sledging did take place on both sides," Raquib said.
The Pakistan manager narrated how the matter was closed when Asif agreed to go and shake hands with Watson after he had discussed the whole issue with Bernard outside the team hotel.
Raquib is heard lamenting the lack of education and common sense among Pakistani senior and junior cricketers narrating experiences of his stint as manager of the Pakistan under-19 team.
"They were members of the under-19 team who were asking for whisky on the flight," Raquib said.
He is also heard advising the inquiry committee members to have a system where players are penalised for poor performances.
"If Mohammad Aamir can get a lakh rupees for taking wickets why should he not be penalised for dropping a catch?" Raquib said.
He also thanked ICC Match Referee Ranjan Madugalle for his handling of the controversy stemming from Shahid Afridi's crazy ball-biting during a one day match in Australia.
"There could have been greater penalties for Afridi but Madugalle had advised me to tell Afridi to accept that he had made a mistake," Raquib said.