Mumbai: The Reserve Bank of India (RBI) has imposed a penalty of Rs 5 crore ($754,000) on the Bank of Baroda (BoB) for irregularities in anti-money laundering (AML) provisions that came to light in October 2015, the public sector lender said here on Monday.
“The Reserve Bank of India has imposed a penalty of Rs 50 million on the Bank of Baroda. Pursuant to the internal audit of the bank, the RBI and investigative agencies in October 2015 were advised by the bank of certain irregularities observed,” the BoB said in a BSE filing.
The Central Bureau of Investigation (CBI) had conducted raids in October 2015 at over 50 locations to probe the illegal transfer of Rs 6,172 crore by the BoB’s Ashok Vihar branch in Delhi in the names of 59 companies in Hong Kong. The companies, it was later found, were registered on wrong addresses.
“The RBI carried out the investigation and noted the deficiencies which were reflective of weaknesses and failures in internal control mechanisms in respect of certain AML provisions such as monitoring of transactions, timely reporting to FIU (Financial Intelligence Unit), and assigning of UCIC (Unique Customer Identification Code) to customers,” the BoB said.
The Bank of Baroda has implemented a comprehensive corrective action plan, to strengthen internal controls and to ensure that such incidents do not recur, it added.
It was alleged that there were 8,667 forex transactions from the Ashok Vihar branch of the bank during the period August 1, 2014, and Aug 12, 2015, which had prompted a probe.
“It was alleged that 59 current account holders and unknown bank officials conspired to send overseas remittances, mostly to Hong Kong, of foreign exchange in illegal and irregular manner in violation of established banking norms under the garb of payments towards suspected non-existent imports,” the CBI had said.
