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25Th July 2016
The Reserve Bank of India (RBI) has imposed a
penalty of Rs5 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 Total Investment & Insurance Solutions
"The Reserve Bank of India has imposed a
penalty of Rs50 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 Total Investment & Insurance
Solutions
The Central Bureau of Investigation (CBI) had
conducted raids in October 2015 at over 50 locations to probe the illegal
transfer of Rs6,172 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. The Total Investment & Insurance Solutions
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. The Total Investment & Insurance Solutions
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