The Central Bureau of Investigation and Enforcement Directorate, is probing one of the biggest trade based money laundering, also referred to as 'banking-hawala scandal'.
It is believed that it started in May, when low-income citizens were used by exporters/importers to send their illegal money to foreign countries. Businessmen Gurcharan Singh, Chandan Bhatia, Sanjay Aggarwal and many others allegedly were behind the transfers to Hong Kong and Dubai, after apparently scheming with the Bank of Baroda Ashok Vihar two branch officials- S K Garg, Assistant General Manager and Jainish Dubey, Head of Foreign Exchange division (arrested by the CBI).
The drivers, vendors etc were allegedly asked to provide their voter ID cards against Rs 10-15,000 (£100-150) per month. Against those IDs, then current accounts were opened by the accused in the name of fake companies. An investigative officer clarified that some names in these companies- Directors and partners- were almost the same and companies were shown registered at fake addresses. Once the accounts were opened, the process of transferring money through dummy companies belonging to exporters/importers started.
Rs 6172 crore (£616,582,800) was deposited in 59 accounts between August 2014-2015, mostly as forex remittances and transfers through other banks. The suspects used another set of persons in this transfers. On noticing the unusual transactions, the Bank’s Internal Audit conducted an investigation and brought out the full details.
Having established a branch in the UK in 1957 the BoB is one of the most popular among the diaspora. Speaking exclusively to Asian Voice, clarifying the credibility of the bank worldwide, Mr Dhimant Trivedi, the Chief Executive, European Operations of Bank of Baroda, said: “It was reported that our Ashok Vihar, New Delhi, India Branch opened some Current Accounts during the period between May 2014 to June 2015, through which large foreign exchange remittance transactions were done.
“During the period May 2014 to August 2015, some outward foreign exchange remittances transactions for the purpose of “Advance remittance for imports” and for other purposes have been remitted through different current accounts to various overseas parties, mainly based in Hong kong.
“Out of the total amount involved, 90% have been received by the Bank through RTGS/ NEFT from various other Banks.
“In those accounts where heavy cash transactions (deposits) took place, regular cash transaction reports (CTRs) were generated and mailed to Financial Intelligence Unit (FIU).
“The matter came to the notice of the Bank in the middle of July 2015 and the Bank ordered internal investigation, the report of which was submitted on 31.08.2015 at Regional Office level and matter was escalated to Corporate Office, who ordered detailed investigation by Bank’s Internal Audit Division, which was commenced on 22.09.2015.
“The matter was reported to investigating Agencies i.e. Central Bureau of Investigation (CBI), Enforcement Directorate (ED) on 24.09.2015 and also to Ministry of Finance & subsequently to Reserve Bank of India.
“There is no significant financial loss to the Bank due to the incident.
“It is pertinent to note that Bank of Baroda brought out the suspicious transaction overboard through its internal process and is not a perpetrator of the fraud, but a victim.
“We further clarify that the Bank’s UK operations are not affected by the dealings of the Ashok Vihar Branch. The UK operations are also regulated by the UK local regulators.”
The Bank was established in India in 1908 in the Princely State of Baroda, Gujarat by Maharaja of Baroda, H. H. Sir Sayajirao Gaekwad III. Based on 2014 data, it is ranked 801 on Forbes Global 2000 list. BoB has total assets in excess of Rs 3.58 trillion (around £35 billion), a network of 5307 branches in India and abroad.
