The Central Bureau of Investigation (CBI) has raided the Bank of Baroda‘s branch to investigate the irregularities in forex transactions. The investigations is launched into the illegal forex transfers of Rs 6,172 crore, suspected to be black money transactions from Bank of Baroda.
The raids were carried out on Saturday i.e 10th Oct 2015, at three places, including BoB’s Ashok Vihar branch and premises of two of its officials – S K Garg (AGM Delhi) and Jainish Dubey (officer-foreign exchange) — and collected documents related to all the companies which opened current accounts and made illegal transfers in the garb of imports.
An internal probe by BoB had revealed that there were over 8,000 forex transactions from newly-opened accounts in the Ashok Vihar branch to different companies based in Hong Kong. The bank had failed to report the transactions and even the income tax department did not pick up the transfers, raising concerns of a systemic failure to detect a fraud despite a near 500 times surge in forex transaction in the bank branch in North Delhi.
The irregular transactions were conducted by splitting large transactions into several smaller ones below the $100,000 to avoid reporting. Such structuring of transactions to avoid reporting to regulatory or tax authorities is termed as “structuring” or “smurfing” in banking circles. There are appropriate software safeguards to ensure that such practices do not take place.
Some of the beneficiary companies include Victroxx International Ltd, Great Asian Exports, King Winner International Ltd, Star Exim Ltd, I touch Infocomm Ltd, Fortune Trading Pvt Ltd, Jasco Ltd, Mega Forwarders and Traders etc. These companies are said to be based in Hong Kong.
Source: Economic Times