The Reserve Bank of India has imposed a penalty of Rs. 50 million on Bank of Baroda (BoB), after finding irregularities in alleged Rs 6,100 crore forex transactions that were revealed in October last year.
“Pursuant to the internal audit of the Bank of Baroda, the Reserve Bank of India and investigative agencies in October 2015 were advised by the Bank of certain irregularities observed,” the bank informed the BSE.
Headquartered in Vadodara, the Bank of Baroda is an Indian state-owned banking and financial services company in India. It was founded by Maharaja Sayajirao Gaekwad III of Baroda (in Gujurat) on 20 July 1908. The bank has a corporate office in the Bandra Kurla Complex in Mumbai. BoB is the second largest bank in India, and also among the Big Four banks of India – other three being the ICICI Bank, State Bank of India and Punjab National Bank. BoB was nationalised on 19 July 1969, by the Government of India. Today, it is ranked 801 on Forbes Global 2000 list (based on 2014 data), with over 5325 branches in India and abroad, and a network of over 8000 ATMs. The bank has overseas branches in world’s major financial centers including New York, Dubai, London, Hong Kong, and Singapore. The bank is doing retail banking via the branches of subsidiaries in Guyana, Botswana, Kenya, Uganda, and Tanzania. It also has presence in Australia, Malaysia and Mauritius.
Last year, Rs 6,100 crore import remittances to Hong Kong were effected by Bank of Baroda’s Ashok Vihar branch in New Delhi. The money was transferred in a series of payments for imports that probably never took place on ground. Both, Enforcement Directorate and the Central Bureau of Investigation (CBI) are now probing the transfer of money. During investigation, the Bank fully cooperated with the RBI, which helped RBI reach to conclusion of its findings.
RBI noted irregularities, failure in internal control mechanisms, and violation of certain anti-money laundering provisions by the bank. RBI noted that the bank failed in monitoring of transactions, assigning of Unique Customer Identification Code to clients, and timely reporting of suspicious dealings to the Financial Intelligence unit.
“The Bank has implemented a comprehensive corrective action plan, to strengthen internal controls and to ensure that such incidents do not recur,” the bank said in its statement.
