RBI imposes Rs 5 crore penalty on Bank of Baroda for Forex irregularities

Reserve Bank of India, India’s central banking authority, has imposed a penalty of Rs 5 crore on state-run Bank of Baroda, because of last year’s alleged Rs 6000 crore forex related irregularities.

"Pursuant to the internal audit of the Bank of Baroda, the Reserve Bank of India and investigative agencies in October 2015 were advised by the Bank of certain irregularities observed," the bank stated.

Also read: Govt infuses Rs 22,915 crore capital in public sector banks

It was in October last year that the RBI had carried out an inspection after Bank of Baroda's New Delhi-based Ashok Vihar branch effected Rs 6,100 crore import remittances to Hong Kong, a case that attracted both CBI and the Enforcement Directorate.

As per these investigators, the amount was probably transferred as payments for imports, which never actually happened.

The RBI investigation has now found out several deficiencies and failures in BoB’s internal control mechanisms as far as anti-money laundering provisions are considered.

"The Bank has implemented a comprehensive corrective action plan, to strengthen internal controls and to ensure that such incidents do not recur," Bank of Baroda added in its statement.

Image source