Bank Of Baroda Tumbles After Forex Scam

The share prices of Bank of Baroda (BoB) on the stock exchange came under pressure after CBI carried out searches at Bank of Baroda branches here in connection with the alleged Rs 6100 crore black money which was transferred to Hong Kong.

The CBI on Sunday continued its raids in connection with the alleged black money transfer of Rs 6,172 crore from Bank of Baroda to Hong Kong. According to agency sources, 50 locations belonging to companies which transferred suspected illegal black money to Hong Kong-based accounts were raided by the CBI on Sunday.

The bank has suspended two officials for allegedly being involved in the Rs 6,100 crore illegal foreign exchange transactions. This was after an internal audit by the bank detected the irregularities and informed the finance ministry, after which CBI and ED were approached for probe.

The internal audit by the bank had shown 59 new current accounts were opened in Delhi's Ashok Vihar branch in the name of different companies, following which crores of rupees were deposited into these accounts, sometimes four-five times a day.

CBI has registered a case under Section 120-B (criminal conspiracy) read with 420 (cheating) of IPC and Section 13(2) read with 13(1)(d) of Prevention of Corruption Act, 1988 against 59 current account holders and unknown bank officials and private persons on a complaint from Bank of Baroda. The Enforcement Directorate has also registered a money laundering case and carried out searches in this connection.

Sources said it was alleged that 59 current account holders and unknown bank officials conspired to send overseas remittances, mostly to Hong Kong, of foreign exchange worth about Rs 6,000 crore in an illegal and irregular manner, in violation of established banking norms, under the garb of payments towards suspected non-existent imports. Most of the foreign exchange related transactions were carried out in newly opened current accounts wherein heavy cash receipts were observed but the branch did not generate Exceptional Transaction Report (ETR) and did not monitor the high value transactions.

The stock hit an intraday low of Rs 168, down 7.84 per cent on the Bombay Stock Exchange (BSE) and now is currently trading at Rs 175, down by Rs 7.3 or 4%.

On BSE, so far 10.60 lakh shares were traded in the counter, compared with an average volume of 8.54 lakh shares in the past one quarter.