While foreign remittances were made from the bank’s Ashok Vihar branch in Delhi, these were not reported as they were lower than the threshold limit of $100,000.
The Central Vigilance Commission (CVC) has urged RBI to make it mandatory for banks to report cases involving multiple transactions within a span of a couple of days that take place from a single account, even if they are lower than the threshold limit.
The CVC has also advised the Indian Banks’ Association (IBA) and RBI that multiple transactions from a single account, even if they are relatively lower than $100,000 on the same day, must be brought to light and reported.
The RBI and CVC are looking to bring in a stringent “know-your-employee” norm. The CVC, which is also part of the multi-agency probe, is set to ask banks to put in place a proper “whistleblowing” guideline, especially in relation to secrecy and protection of the whistleblower.
The CVC has also asked banks to undertake a full scrutiny of their own systems, including know your customer norms as well as transaction patterns of their high-value account holders.
The state-owned banks have incurred a loss of over Rs. 11,000 crore in the previous financial year on account of frauds, as per RBI data. In 2013-14, about 2,500 cases of frauds were reported, resulting in a loss of Rs. 7,542 crore.
The Bank of Baroda too, in a statement, said the lender would undertake a comprehensive review and identify the deficiencies in the structure, processes and systems, with a view to prevent recurrence of such an incident.”