The scam involves Rs. 6,000 crore illegal remittances that have suspected to be flown out from Bank of Baroda's Ashok Vihar branch in New Delhi to Hong Kong and Dubai.
In a statement, HDFC Bank said, “The bank has a zero-tolerance policy for any misconduct on the part of its staff and any deviation from its clearly defined processes is viewed very seriously. Swift action is taken both at an organizational and employee level, and as per process the employee in question has been suspended pending the outcome of the investigation.”
”In response to reports relating to investigations against one of our employees, we would like to state that the matter is being examined internally on top priority. The Bank is also extending its full cooperation and support to the authorities as they conduct their investigations,” the statement further adds.
As per the investigation so far, both Central Bureau of Investigation and Enforcement Directorate have arrested six persons including Kalra, who is HDFC Bank’s Forex Sales Manager in the forex department, for the alleged money laundering.
While CBI arrested Suresh Kumar Garg, the assistant general manager of Ashok Vihar Branch and Jainis Dubey, the foreign exchange head, the persons arrested by the Enforcement Directorate include Kamal Kalra, Chandan Bhatia, Gurucharan Singh and Sanjay Aggarwal, who were allegedly involved in the transaction of 15 accounts.
Bhatia, Singh and Aggarwal are said to be owners of companies based in Hong Kong and Dubai towards which the money was being transferred through 59 accounts at the bank's Ashok Vihar branch.
Meanwhile, Bank of Baroda’s internal investigation had detected irregularities in foreign exchange transfers from said branch and also suspended five officers. The public sector bank has also changed the concurrent auditor firm of the specific branch.
“The investigation currently underway pertains to 59 current accounts, which were opened during the period between May 13, 2014 to June 20, 2015 and were used for outward foreign remittance transactions aggregating to $576 million (Rs 3,672.30 crore) predominantly for the purpose as “Advance remittance for imports” to overseas parties numbering about 418, mainly based in Hong Kong,” Bank of Baroda had said on Tuesday.
“It is pertinent to note that less than 10 per cent (Rs 343 crore) of the amount involved had been deposited in these accounts by way of cash and balance 90 per cent amount had been received through RTGS / NEFT from 51 different banks. Bank would also like to clarify that while the investigations are underway, at the current stage, it does not envisage significant financial losses on account of this incident,” it added.
There are many unanswered questions which continue to be probed, such as opening of current accounts in spite of inconclusive KYC process in some cases, individual failure of detection of irregularities, non-follow up of system alerts to track exceptional transactions and reasons for the long lead time to identify these irregularities.
The newly appointed MD & CEO, P.S. Jayakumar said, “My utmost priority is to examine the current situation and bring about the necessary changes within the bank to ensure such unfortunate incidents do not recur. This will include the appointment of an external accounting firm for full review of our KYC norms and its effectiveness across all branches…”
Source : Thehindubusinessline