Bank of Baroda has the reputation of being one of the few well-managed banks in India. It is also reflected in the market price of its shares.
Therefore, any mishap in the bank attracts huge interest. A few days ago, it was reported that one of its branches in Ahmedabad was likely to lose around Rs.350 crore in the bill transactions of a particular company. The modus operandi was crude and archaic. Bills were purchased by the bank and when they remained unpaid for a long time, further bills were purchased to square off the earlier transaction. This manoeuvre was repeated till the irregularity could no more be hidden.
As if this was not enough bad news, now we are told that Ashok Nagar, Delhi branch of the same bank has illegally remitted foreign exchange worth Rs.6,172 crore to Hongkong without following normal procedure. Rice, cashew and pulses were supposed to be imported, but actually no import took place. The bank did not lose its money. But its reputation is now in tatters.
Systems and procedures were flagrantly violated. Manual entries were effected overriding electronic systems. RBI's response will be keenly watched. Names of the culprit-entities who indulged in illegal remittance of apparent black money should be disclosed.
Therefore, any mishap in the bank attracts huge interest. A few days ago, it was reported that one of its branches in Ahmedabad was likely to lose around Rs.350 crore in the bill transactions of a particular company. The modus operandi was crude and archaic. Bills were purchased by the bank and when they remained unpaid for a long time, further bills were purchased to square off the earlier transaction. This manoeuvre was repeated till the irregularity could no more be hidden.
As if this was not enough bad news, now we are told that Ashok Nagar, Delhi branch of the same bank has illegally remitted foreign exchange worth Rs.6,172 crore to Hongkong without following normal procedure. Rice, cashew and pulses were supposed to be imported, but actually no import took place. The bank did not lose its money. But its reputation is now in tatters.
Systems and procedures were flagrantly violated. Manual entries were effected overriding electronic systems. RBI's response will be keenly watched. Names of the culprit-entities who indulged in illegal remittance of apparent black money should be disclosed.
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