Bank of Baroda scam: The alleged Rs 6000 crore forex scam has stirred up a hornet's nest for the country's banking sector.
The alleged Rs 6000 crore forex scam has stirred up a hornet’s nest for the country’s banking sector. While the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) investigate, the money laundering case gets all the more murkier.
Here are 10 things to know about the Bank of Baroda forex scam
1. It was alleged that a whopping Rs 6,172 crore black money was remitted from Bank of Baroda to Hong Kong camouflaged as payments for non-existent imports like cashew, pulses and rice. The amount was allegedly deposited in 59 accounts in cash as advance for imports that never existed. On October 12, 2015, CBI and the Enforcement Directorate started investigating the matter.
2. It is also alleged that the amount was deposited in 59 accounts of the bank’s Ashok Vihar branch (New Delhi) in cash as advance for import and the money was sent to some select companies in Hong Kong.
3. The branch opened 59 current accounts from May 2014 to June 2015 through which large foreign exchange remittances were made, the Bank of Baroda said in a regulatory filing.
4. During this one year, a total of 5,853 outward foreign remittances aggregating USD 546.10 million (around Rs 3,500 crore) were made through 38 current accounts to various overseas parties numbering some 400, mainly based in Hong Kong and one in the UAE.
5. Remittances were sent to Hong Kong and Dubai via banks, actual exports were sent to Afghanistan. “The records show that the alleged exports were sent to Afghanistan but invoices were generated by Hong Kong importers. It is now a matter investigation as to who received them in Afghanistan and what the exports were linked to,” said an ED officer.
6. Much before 59 accounts, which are under the scanner of the ED and the CBI, were opened in Bank of Baroda, 13 accounts were opened in HDFC Bank during February-March 2015 to send money abroad.
7. Reacting to the developments, an HDFC Bank statement said: “The matter is being examined internally on top priority. The bank is also extending its full cooperation and support to the authorities. The bank has a zero-tolerance policy for any misconduct on the part of its staff.”
8. P S Jayakumar, the former chief executive of VBHC Value Homes took charge as the new MD and CEO of the of the scam-hit Bank of Baroda for three years on October 13, 2015. BoB had remained headless for the past 14 months.
9. Finance Minister Arun Jaitley said the magnitude of the alleged black money transfer through state-owned Bank of Baroda (BoB) will only be known after completion of the multi-disciplinary probe.
10. On October 12 as many as six persons, including Garg and Dubey were arrested on charges of criminal conspiracy, cheating and provisions of the Prevention of Corruption Act. The other four arrested, include Kamal Kalra, working with the foreign exchange division of HDFC bank, Chandan Bhatia, Gurucharan Singh Dhawan and Sanjay Aggarwal.