CVC seeks report from CBI, BoB in Rs 6,100 crore forex scam

The CBI and ED are probing transactions of Rs 6,100 crore to Hong Kong from a Bank of Baroda's Ashok Vihar branch in Delhi which is believed to be trade-based money laundering as the amount was transferred in garb of payments for imports, that never took place.

New Delhi: Anti-graft watch dog Central Vigilance Commission has sought a report from the CBI and Bank of Baroda in connection with an on-going probe in alleged fraudulent transactions of Rs 6,100 crore to Hong Kong.

Besides, the Commission, which exercises superintendence over the CBI on anti-corruption matters, is planning to bring in "systematic changes" in banks to check suspicious transactions aimed at moving black money.

"We have sought a report from the Chief Vigilance Officer of the bank as well as the CBI," Central Vigilance Commissioner K V Chowdary told PTI here.

He said an enquiry has also been instituted in the matter by the Commission.

Chowdary said the role of bank officials will be looked into to find out their involvement in the scam.

"The involvement of the officer of the central government or of the bank, in so far as facilitating this scam is concerned, will be certainly looked into.

"We will also look into the aspect of bringing any systematic changes and how a system should be introduced in the banks to give an early indication on this kind of thing," he said.

His comments assume significance as Minister of State for Finance Jayant Sinha had yesterday said that the scam is a one off incident and not a reflection of any systemic problem in the banking sector.

The Central Bureau of Investigation (and Enforcement Directorate (ED) are probing transactions of Rs 6,100 crore to Hong Kong from a Bank of Baroda's Ashok Vihar branch here.

The huge transaction is believed to be trade-based money laundering as the amount was transferred in garb of payments for imports, that never took place.

As per CBI probe so far, Rs 6,100 crore were transferred through nearly 8,000 transactions done between July, 2014 and July, this year.

The CVC has made several suggestions to the bank for systematic improvements to check recurrence of such cases.

"We have made several suggestions for systematic improvements like where there is a abnormal transaction the next higher level of the officer who is authorised to conduct a transaction should get an alert.

"Similarly when documents are submitted before banks we have made it mandatory that they should verify whether the documents are correct or not," Chowdary said.

He said that Commission has found that a large number of loan applicants have been enclosing fabricated balance sheets allegedly signed by a chartered accountant.

"So we have brought in a procedure with the help of the Institute of Chartered Accountants of India (ICAI) by which banks are now required to compulsorily verify with the CA whether he issued the certificate and whether he stood by the certificate so that some amount of verification is made mandatory," he said.

Giving details of the case, Chowdary said the money has been sent abroad and the bank per se has not lodged any complaint.

"I am not very sure whether the bank lost any money in the process but it became a facilitator for such a fraud. Whether they were capable of detecting that, what they are doing is an illegal activity, and if so whether they should have prevented it.

"That is the scope of the bank's inquiry. But the main issue is who sent this money and for what purpose." the CVC said.