Scam-hit BoB Plans System to Check Violations · change scam at one of its branches, is developing...
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15 WWW.ECONOMICTIMES.COM Economy Sachin.Dave @timesgroup.com Mumbai: Bank of Baroda (BoB), which was hit by a . `6,000-crore foreign ex- change scam at one of its branches, is developing a centralised monitoring sy- stem to detect irregularities. BoB has roped in Deloitte to set up a more robust KYC (know your customer) sy- stem, which will be able to flag issues. This comes a month after the finance mi- nistry roped in EY to investi- gate the forex scam where black money was allegedly remitted from the bank’s As- hok Vihar (New Delhi) branch to Hong Kong. The framework is being created after the anti-mo- ney laundering norms were allegedly violated by the branch. Both the Central Bureau of Investigation and the Enforcement Direc- torate are investigating the irregularity. The finance ministry is separately loo- king into the case through EY, people close to the deve- lopment said. According to the bank ex- ecutives, Bank of Baroda is strengthening its centrali- sed forex back office opera- tions “in order to provide improved services to custo- mers, facilitate smooth ope- rations and monitor forex transactions by incorpora- ting additional checks and controls”. The bank is also looking in to the anti-money laundry mechanism where it would be able to detect suspicious transactions. “The main purpose of creating the new framework is to identify anomalies at the earliest,” a Bank of Baroda spokesper- son said. “On the previous instance, our system suc- Scam-hit BoB Plans System to Check Violations cessfully detected the irre- gularities which led to un- covering of the scam. But going forward, we are try- ing to make the processes more agile and intelligent. To achieve the same we are developing a centralised monitoring system.” The spokesperson also confir- med that Deloitte has been roped in for the purpose. According to the people cited earlier, the Reserve Bank of In- dia (RBI) had come down hard on public sector banks after the alleged irregularity. Also, the banking regulator has as- ked public sector banks to cre- ate a stricter framework where simi- lar irregula- rities can be pre-empted. Under the new fram- ework, BoB will introdu- ce initiatives like a cooling period for fo- rex remittan- ce for new customers, pre-aut- horisation of certain transac- tions by one level of higher authority and lowering thres- hold limits on number and amount for remittances du- ring a given period, the bank executive quoted earlier said. “We are also in the process of setting up an off-site transac- tion review unit,” the bank sa- id. The cooling period for re- mittances would mean that bank executives can increa- se the ti- me (pe- riod) when mo- ney is re- mitted from the Indian ac- count to another account. The bank is also looking into the anti-money laundry mechanism where it would be able to detect suspicious transactions
Transcript of Scam-hit BoB Plans System to Check Violations · change scam at one of its branches, is developing...
15�WWW.ECONOMICTIMES.COM
Economy
Mumbai: Bank of Baroda(BoB), which was hit by a.̀ 6,000-crore foreign ex-change scam at one of itsbranches, is developing acentralised monitoring sy-stem to detect irregularities.
BoB has roped in Deloitte toset up a more robust KYC(know your customer) sy-stem, which will be able toflag issues. This comes amonth after the finance mi-nistry roped in EY to investi-gate the forex scam whereblack money was allegedlyremitted from the bank’s As-hok Vihar (New Delhi)branch to Hong Kong.
The framework is beingcreated after the anti-mo-ney laundering norms wereallegedly violated by thebranch. Both the CentralBureau of Investigationand the Enforcement Direc-torate are investigating theirregularity. The financeministry is separately loo-king into the case throughEY, people close to the deve-lopment said.
According to the bank ex-ecutives, Bank of Baroda isstrengthening its centrali-sed forex back office opera-tions “in order to provideimproved services to custo-mers, facilitate smooth ope-rations and monitor forextransactions by incorpora-ting additional checks andcontrols”.
The bank is also looking into the anti-money laundrymechanism where it wouldbe able to detect suspicioustransactions. “The mainpurpose of creating the newframework is to identifyanomalies at the earliest,” aBank of Baroda spokesper-son said. “On the previousinstance, our system suc-
Scam-hit BoBPlans System to Check Violations
cessfully detected the irre-gularities which led to un-covering of the scam. Butgoing forward, we are try-ing to make the processesmore agile and intelligent.To achieve the same we aredeveloping a centralisedmonitoring system.” Thespokesperson also confir-med that Deloitte has beenroped in for the purpose.
According to the people citedearlier, the Reserve Bank of In-dia (RBI) had come down hardon public sector banks afterthe alleged irregularity. Also,the banking regulator has as-ked public sector banks to cre-
ate a stricterframeworkwhere simi-lar irregula-rities can bepre-empted.
Under thenew fram-ework, BoBwill introdu-ce initiativeslike a coolingperiod for fo-rex remittan-
ce for new customers, pre-aut-horisation of certain transac-tions by one level of higherauthority and lowering thres-hold limits on number andamount for remittances du-ring a given period, the bankexecutive quoted earlier said.
“We are also in the process ofsetting up an off-site transac-tion review unit,” the bank sa-id. The cooling period for re-mittances would mean thatbank executives can increa-se the ti-me (pe-riod)when mo-ney is re-mittedfrom theIndian ac-count toanotheraccount.
The bank isalso lookinginto theanti-moneylaundrymechanismwhere itwould be ableto detectsuspicioustransactions
