BoB fallout: RBI to revise forex norms Court extends ED custody of four accused by six days

STRINGENT Know-your-employee norm, whistleblower protection on agency’s mind

NEW DELHI: Following the alleged `6,000-crore foreign exchange scam at one of India’s largest public sector banks — Bank of Baroda — the Reserve Bank of India (RBI) is likely to make it mandatory for all lenders to report smaller transactions from a single account.

While foreign remittances were made from the bank’s Ashok Vihar branch, these were not reported as they were lower than the threshold limit of $100,000.

The Central Vigilance Commission (CVC) has urged RBI to make it mandatory for banks to report cases involving multiple transactions within a span of a couple of days that take place from a single account, even if they are lower than the threshold limit.

“The CVC took up the matter with the CBI to register a case forthwith u/s 8(1)d of CVC Act and Enforcement Directorate was also advised similarly. The raids were conducted the very next day and immediate action was taken by both the agencies, which is continuing on a 24x7 basis. The CVC has also advised the Indian Banks’ Association (IBA) and RBI that multiple transactions from a single account, even if they are relatively lower than $100,000 on the same day, must be brought to light and reported,” TM Bhasin, vigilance commissioner told HT.

The RBI and CVC are looking to bring in a stringent “knowyour-employee” norm.

The CVC, which is also part of the multi-agency probe, is set to ask banks to put in place a proper “whistleblowing” guideline, especially in relation to secrecy and protection of the whistleblower.

“One of the main ways to ensure that these incidents do not happen is to strengthen the whistleblowers’ norms,” Bhasin added.

The CVC has also asked banks to undertake a full scrutiny of their own systems, including know your customer norms as well as transaction patterns of their high-value account holders.

The state-owned banks have incurred a loss of over `11,000 crore in the previous financial year on account of frauds, as per RBI data. In 2013-14, about 2,500 cases of frauds were reported, Is the amount for which the CBI has initiated an investigation in connection with the alleged illegal remittances from the bank branches. BoB, however, has said that the revised estimate indicates that the actual amount transferred is much lesser. The bank claims that 90% of the money that was transferred came from at least 30 other banks — both public and private Over

5,800 foreign remittances of about `3,600 crore were undertaken in one year, sent to 418 overseas parties, mainly in Hong Kong Several accounts were also opened in HDFC Bank during February-March 2015 to send money abroad

resulting in a loss of `7,542 crore.

The Bank of Baroda too, in a statement, said the lender would undertake a comprehensive review and identify the These accounts also receive money from other banks through RTGS and NEFT

“deficiencies in the structure, processes and systems, with a view to prevent recurrence of such an incident.”

“My utmost priority is to examine the current situation Money is sent as advance remittance for imports, which include cashew and rice, most of them that never happened and bring about the necessary changes within the bank to ensure such unfortunate incidents do not recur,” PS Jayakumar, MD and CEO, BoB said. NEW DELHI: A Delhi court on Saturday extended by six days the Enforcement Directorate (ED) custody of four people, including an HDFC bank employee, arrested on money laundering charges in the `6,000crore remittances case of a Bank of Baroda (BoB) branch.

The ED told the court it had ascertained the money trail of `600 crore and wanted to interrogate the accused further to trace the remaining amount.

Accused Kamal Kalra, working with the HDFC Bank’s foreign exchange division; Chandan Bhatia, Gurucharan Singh Dhawan and Sanjay Aggarwal were produced by the ED before additional sessions judge Manoj Jain who extended their police remand for another six days till October 23.

“Keeping in mind the seriousness of the matter and the overall facts and circumstances of the case, police remand is extended for a period of another six days,” the judge said.

ED special public prosecutor Naveen Kumar Matta said the allegations were grave in nature and the case is of a serious magnitude as it involves a huge amount of `6,000 crore.

Seeking extension of police remand of the accused, the agency said the documents related to the case were voluminous in nature and various other documents had to be recovered as well.

Meanwhile, the counsel appearing for the accused opposed the ED’s plea for extension of police remand, saying they have already been in custody for the past four days and there was no need for their further custodial interrogation.

THE ED SAID IT HAD ASCERTAINED THE TRAIL OF `600 CR AND WANTED TO QUIZ THE ACCUSED FURTHER TO TRACE THE REMAINING AMOUNT