All public sector and private banks have been asked by the Reserve Bank of India to conduct a “thorough internal audit” and put the report before their respective audit committees, as part of the central bank's efforts to check fraudulent foreign exchange transactions. The move comes in the wake of irregularities that came to light last year in Rs 6,100-crore import remittances effected by Bank of Baroda’s Ashok Vihar branch in New Delhi.

Saddled with bad debts, Bank of Baroda (BoB) plans to refinance its stressed corporate accounts and change management in certain cases.

The bank, which is also embroiled in a forex remittance scam, will infuse Rs 708 crore to refinance six corporate accounts, majority of which are power companies, under the special Reserve Bank of India refinance scheme popularly called 5/25.

The Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) has said that low-income citizens like hawkers, auto-rickshaw drivers were used by perpetrators to send their ill-gotten money to foreign countries in the Bank of Baroda black money laundering case, a TOI report said.

The report said that about 59 persons living in slums, rickshaw pullers, vendors, drivers, household workers, were approached by black money hoarders and made directors of nearly 59 companies in the Bank of Baroda money laundering scandal which has amounted to Rs 6,172 crore.

Bank of Baroda, India's second-biggest state-run lender by assets, second-quarter profit slumped about 89% on Friday, hit by a sharp rise in provisions as bad loans jumped.

Shares in the Mumbai-based bank, which in August became one of the first state owned lenders to appoint a private sector chairman, tumbled almost 10% at the market open. At 0400 GMT, the stock was down 5.5%.

Rampant abuse of formal banking channels to illegally remit large sums of foreign exchange outside India is not just limited to Bank of Baroda (BoB) forex scam. The perpetrators have been using the banking channel for the past one-and-a-half year and the amount is well over Rs 50,000 crore, investigating officers from Enforcement Directorate (ED) told dna. According to the ED sleuths, banks are reluctant to lodge First Information Reports (FIRs) on the ground that the money laundering has not caused any loss to them.

Expressing concern over illegal Rs 6,000 crore transfer of funds through a Bank of Baroda branch, RBI Governor Raghuram Rajan said it will be pursued both by the central bank and investigative agencies to the “ultimate conclusion” to ensure that the guilty are made to “pay the price” for it.

He also said that if not pursued quickly, such frauds create an atmosphere of impurity which then breeds more such practices.

New Delhi: The Enforcement Directorate (ED), which investigates foreign exchange violations, on Tuesday arrested four people in connection with the suspected transfer of black money from Bank of Baroda accounts to entities based in Hong Kong and the United Arab Emirates (UAE).

Separately, the Central Bureau of Investigation (CBI) arrested an assistant general manager and another official dealing with foreign exchange at the bank’s Ashok Vihar branch in New Delhi.

Like many others, I am curious to know what does P.S. Jayakumar want to do on his first day in office. The former managing director and chief executive officer (CEO) of VBHC Value Homes Pvt. Ltd, Jayakumar took over as managing director (MD) and CEO of Bank of Baroda (BoB), India’s second-largest lender by assets, on Tuesday. Jayakumar, 53, is one of the two bosses of state-owned banks hired from the private sector, the other being Rakesh Sharma of Lakshmi Vilas Bank who took over as MD and CEO of Canara Bank in September.

Bank of Baroda stock dipped as much as 8% to Rs 168 on the BSE in intra-day trade after the Central Bureau of Investigation (CBI) on Saturday carried out searches at the bank’s branches in New Delhi for alleged foreign exchange violations.

Besides alleged "illegal transfers" of foreign exchange of over Rs 6,000 crore from a branch in Delhi, a Rs 350-crore bill discounting scam in Gujarat has also damaged the bank's reputation.

The Central Bureau of Investigation on Saturday carried out searches at Bank of Baroda branches in New Delhi in connection with the alleged transfer of Rs 6100 crore black money to Hong Kong.

The transactions were allegedly carried out with the collusion of bank officials. The unusual remittances were spotted in the audit report of the bank, CBI sources said.

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