India’s BoB Suspends Two Senior Executives Over Forex Scam
India’s Prime Minster Narendra Modi and finance minister Arun Jaitley have been targeting corporation and individuals who have stashed black money overseas and have tightened their fiscal policies to ensure that money laundering schemes can be prevented.
The Bank of Baroda (BoB) which is a state owned bank recently made the headlines after an audit exposed the fact that over six thousand crore rupees in black money had been transferred to Hong Kong and the United Arab Emirates. The internal audit report was brought to the attention of the Central Bureau of Investigation (CBI) and the authorities raided over 50 branches of the Bank of Baroda in Mumbai during the weekend.
The Bank of Baroda’s foreign exchange revenue was just 44.98 crore in the fiscal 2013-14 but rose significantly to 21,528.52 crore in 2014-15. The bank issued a statement to the stock exchanges stating that over 3,500 crore rupees had been transferred via 38 accounts and deposited in nearly 400 beneficiary accounts spread across the Middle East and Hong Kong.
The Bank of Baroda’s Ashok Vihar branch was identified as the branch were most of these transactions were taking place and were Foreign Exchange Management Act rules were violated.
The investigation focused on two senior executives in the Ashok Vihar branch who were suspected of playing a major role in this massive forex scam. The bank has suspended both these executives and the authorities are now questioning them to find out how the entire scam was played out.
The Enforcement Directorate (ED) and the CBI have also pulled up 59 account holders, private individuals and a few more bank officials who are suspected to be a part of the scam and have filed a case against these individuals based on serious violations against the Prevention of Corruption Act and the Indian Penal Code.
Bank of Baroda employees who did not want to be named were surprised that such a massive scam had taken place. In a statement, one of the employees said
Two of the senior officials from the branch are suspended. We are investigating on how such abnormal transactions bypassed out system. Bank officials stated that this scam would not leave the bank out of pocket or in a financial deficit but the scam would definitely impact the reputation of the bank
The shares in the Bank of Baroda dropped by 8% on Monday once news broke of the forex scam.
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