BoB scam: CBI raids 10 locations in NCR
Taking its investigations into the Bank of Baroda (BoB) forex scam forward, the CBI carried out searches at 10 locations in the NCR region. Officials said that Rs.40 lakh in cash, rubber stamps of around 44 different companies, 15 PAN cards and various documents were recovered during the searches. In addition, they recovered foreign currency notes from China, USA, EU, UAE and Hong Kong.
Bank of Baroda's internal audit team red-flagged the irregularities to the revenue intelligence department of the finance ministry which started investigating the unusual business in the bank. The irregularities were the forex transactions which were done mainly through advance remittances for import through newly-opened current accounts. Collaborating with the bank, the accused had transferred funds to Hong Kong-based companies.
Congress dismissed claims of PM Narendra Modi that there have been no scams in his regime and alleged Rs. 6000 crore black money was sent out of the country. Congress claimed that government was aware of the scam since two months but no action was taken. Congress alleged that the scam has been carried out in full knowledge of the finance ministry.
Advanced remittance is a letter sent by a customer to a supplier, to inform the supplier that their invoice has been paid. If the customer is paying by cheque, the remittance advice often accompanies the cheque.
Central Bureau of Investigation (CBI), Enforcement Directorate (ED) and Serious Fraud Investigation Office (SFIO), in a joint operation conducted extensive raids on Bank of Baroda's Ashok Vihar branch in Delhi. The raids were conducted after bank officials recently stumbled upon illegal transfers of Rs. 6,172 crores in foreign exchange made to Hong Kong. The money was transferred by 59 companies through newly opened accounts.
The bank through an internal investigation found that the forex business of its Ashok Vihar branch shot up to Rs.21,529 crores during 2014-15 (an increase of more than 500 times -- from Rs.45 crores in 2013-14.)
Bank of Baroda's AGM and Forex branch head were arrested by the Central Bureau of Investigation (CBI) 4 intermediaries were also taken into custody by the Enforcement Directorate (ED). CBI had conducted several searches on 11th October and questioned suspects. The agency said that the most of the 59 account holders involved in the forex scam had given wrong addresses.
Investigators claimed that almost 20 of the 59 account holders had accounts in HDFC bank too. ED also arrested Kamal Kalra among the six people who were arrested on 13 October; he worked with the foreign exchange division of HDFC Bank. HDFC's spokesperson said that they had a zero-tolerance policy for misconduct on the part of any staff and they were fully cooperating.
Finance ministry asked CBI to fast-track the probe in order to catch the offenders and find out the exact amount involved in the scam. IDFC, a leading finance company, had asked for downgrading Bank of Baroda (BoB) from being an outperformer to neutral, following the forex scam. IDFC said BoB's CEO would need to rectify the mistakes and clean up its books to improve.
RBI governor Raghuram Rajan said that the Central Bank and investigating agencies will make the guilty pay the price. Rajan said that the forex scam raised questions about fraud in the system He also said that it should be found out if there was deliberate laxity, deliberate violation of rules in order to give private gains to certain parties.
In a shocking discovery in the 'bank hawala scam', the Enforcement Directorate revealed that 59 low-income people had been transformed into pseudo-entrepreneurs in the Rs.6,172 crore money laundering Bank of Baroda scandal. The drivers, vendors etc were required to give their voter ID cards for which they were paid Rs.10,000- 15,000 every month. Using these ID proofs, they were shown as Directors.
