CBI searches Bank of Baroda branches for Rs 6,100-crore suspected black money transfer

MUMBAI: State-run Bank of Baroda has suspended two senior officials and initiated an investigation to verify if its internal systems were tampered with leading to an alleged forex scam in one of its Delhi branches.

On Saturday, sleuths from the Central Bureau of Investigation, Enforcement Directorate and Serious Fraud Investigation Office (SFIO) raided Bank of Baroda’s Ashok Vihar branch in Delhi where officials recently stumbled upon illegal transfers of Rs 6,172 crores in foreign exchange made to Hong Kong. The money was transferred by some 59 companies through newly opened current accounts in the branch.

The bank independently is also probing whether its software systems were adequate and lived up to the promise of sensing suspicious transactions, said one of the persons who did not want to be identified. Although these transactions happened in the bank, the bank will not suffer any losses since it had not lent any money to the company and the group of companies which is suspected to have been involved in such deals.

“...we have suffered reputation risk. We are investigating how such abnormal transactions bypassed our system,” said another senior official who did not want to be named. BB Joshi, executive director of Bank of Baroda, could not be reached for comment. The development comes at a time when Citibank’s PS Jayakumar is set to join as managing director and chief executive next week. He is among the few bankers from the private sector chosen by the government to head a public sector bank.

The dubious transactions came to light when the internal inspection department found out how there are transfers of just about $100,000 to same entities on the same day. Software have a threshold of $100,000 to throw up an alert. It immediately alerted the head office. Following this a flash report was issued and the bank filed an FIR.