Bank of Baroda faced a heavy tax penalty amounting Rs. 5 crore in charge of foreign exchange scam case by Reserve Bank of India. The charges as discussed are weaknesses and failures in internal control mechanism in the context of anti-money laundering case provisions, monitoring of transactions, timely reporting to foreign investigations unit as well as assigning of unique customer identification code to customers. The bank was levied of charges last year.
In recent stock exchange reportedly filed by the bank stated that the move followed by an internal audit and investigative agencies which pointed towards the weaknesses. The scam came up front when a large number of private and public lenders got affected by it. It took up a comprehensive action plan thus to rectifying, strengthening, and ensuring such incident do not take place in near future.
In a confined notification, the bank stated that in October 2015 the Central Bureau of Investigation (CBI) conducted raids in all the branches spread across the country, which consisted not only Bank of Baroda but HDFC Bank also. The employees of the bank got involved in a foreign exchange scam which involved a series of money laundering along with illegally transferring funds to the various account in countries such as HongKong and UAE.
Apart from the total amount, the bank’s Ashok Vihar Branch in New Delhi imported remittances worth Rs. 6,100 crores. The matter got cautious when a huge number of amount got affected during transactions which even led to irregularities. Also, an investigation was conducted after which the entireissue came in hands.
The Supreme financial institution RBI carried an extensive search in accordance with CBI thus imposing crores of currency as penalty measures. A few days back Rajan (RBI Governor) opinionated that it was high time that centre, as well as RBI, get strict towards other banks in the context of lending money as well as promoting small financial banks to reduce money laundering and forgery cases.