Bank of Baroda fraud case: CBI files charge sheet in Rs 6000 crore illicit remittances case

NEW DELHI: CBI on Thursday filed its charge sheet against two employees of Bank of Baroda for offences including criminal conspiracy and cheating in connection with alleged illegal remittances of over Rs 6,000 crore made to over 350 accounts in Hong Kong and Dubai from one of its branch here.

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Additional General Manager S K Garg and Jainish Dubey, who headed the foreign exchange division at Bank’s Ashok Vihar Branch have also been charged under provisions of Prevention of Corruption Act even as probe to identify and nab main kingpins continues.

CBI spokesperson said the charge sheet has been filed at Special Court, Rohini.

The agency is yet to nab the kingpins who were allegedly using the channel to send money abroad for which it has kept the investigations open and will later file supplementary charge sheet.

“The investigation revealed that both the accused had abused their official position and in conspiracy with each other and with the said account holders had allegedly cheated and misappropriated the bank funds to the tune of Rs 13.75 crores (approx), thereby causing alleged loss to Bank of Baroda,” the official said.

In the FIR, the agency has alleged that 59 current account holders and unknown bank officials conspired to send overseas remittances, mostly to Hong Kong, of Foreign Exchange worth approximately Rs 6,000 crore in illegal and irregular manner, through 6,255 transfers during May 2014-July 2015, in violation of established banking norms under the garb of payments towards suspected non-existent imports.

Giving details about the modus operandi of the officials, the CBI sources said the alleged irregularities took place broadly at three levels–accounts were opened in fictitious names in contravention of KYC norms, the manipulations in the accounts to facilitate foreign exchange transfers and the source of money which was being transferred from multiple accounts to these accounts.

“The accounts were allegedly opened either in fictitious names or in the names of persons who were employed in different companies. Forged and fake identity papers like PAN Cards, Voters ID cards etc. were allegedly used for opening the accounts” the spokesperson said.

These accounts were allegedly opened by about eight persons (in the name of their employees or innocent poor people) who are being considered as mastermind of the scam, they said.

The sources said the loss was caused to the Bank because Dubey, who allegedly had access to the accounts of the clients, entered into criminal conspiracy with them to manipulate the transfer entries.

“Sometimes the exchange rates for one dollar was shown as Rs.0001 and foreign exchange was transferred. Later, the entries were reversed to original rate of Dollar vis a vis rupee. But there were so many transactions that some times reversing did not take place resulting in loss to the bank,” an official said.

Similarly, if the client did not have enough amount in his account, Dubey allegedly used to credit their accounts from the contigency funds of the branch which were later reversed when clients deposited funds but again some entries were not reversed which added to the loss to the bank.

The sources said these acts were in alleged violation of banking norms and the officials allegedly exploited the loopholes in the system as they could manually erase debit entries from their clients.

The sources said these clients were sending such large number of remittances to facilitate underinvoicing and overinvoicing in the import and export bills.

While the importers were allegedly underinvoicing their products and sending payments in the form of these illicit channels those exporting products were allegedly using it for extracting duty drawback from the Government, they said.

“It was also alleged that the amount remitted in each transaction would be kept at less than $100,000…The amount was remitted as advance for import and in most of the cases, the beneficiary was the same,” CBI spokesperson said.

She said 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.