Sources at the Reserve Bank of India (RBI) say systemic implications have been ruled out. The government-owned lender has already suspended two officials, while the Central Bureau of Investigation (CBI) is carrying out searches at many other branches of the bank.
The allegedly illegal transactions came to light after BoB noticed its Ashok Vihar branch in the national capital had unusually heavy foreign exchange transactions.
Between May 2014 and August 2015, 5,853 outward foreign remittances, amounting to Rs 3,500 crore, primarily for advance remittances for import were recorded. In a communication to stock exchanges, the bank said the funds were transferred through 38 current accounts to foreign parties, numbering 400, primarily based in Hong Kong, and one in the UAE.
While the central bank has ruled out systemic implications and said the incident is a one-off, it is likely to quiz several banks from which money was transferred. A BoB official said the funds were transferred from public sector, private and foreign banks.
RBI sources say the incident might prompt the banking regulator to tighten anti-money laundering norms.The central bank has voiced concern over adherence to banking guidelines. RBI has a zero-tolerance policy on violations of money-laundering or know-your-customer (KYC) norms.
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