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Remain alert on smaller forex transfers from single accounts: CVC to RBI, IBA

The Central Vigilance Commisioner( CVC) has asked RBI and Indian Banks’ Association (IBA) to red flag multiple transactions of smaller amounts from a single account and ensure compliance of KYC norms to check fraudulent forex transactions in the wake alleged Rs. 6,100 crore foreign remittance scam through Bank of Baroda, a top official said.

“We have written to Reserve Bank of India (RBI) to say that if smaller forex transactions of less than one lakh dollars are being made than it should come to your notice,” Vigilance Commissioner T M Bhasin said.

He said similar communication has been sent to IBA chief, saying there may be “attempts to camouflage generation of alerts by sending small amount of money through multiple transactions of foreign exchange abroad. We have told RBI and IBA that they should tell banks to red flag transactions of smaller amount from one account.”

At present, an alert is generated only when foreign exchange (forex) remittance is over one lakh dollars. “IBA has also been asked to tell all member banks that they follow Know Your Customer (KYC) and Anti-Money laundering (AML) guidelines so as to check reoccurence of such (Bank of Baroda case) incidents,” he said.

On the recent forex scam in which about Rs 6,100 crore were remitted to Hong Kong allegedly misusing Bank of Baroda, Bhasin said Enforcement Directorate (ED) has been asked to look into the matter and if these were not genuine transactions then they should work on repatriation of the money.

Chowdary said the CVOs have been made to access the pendency of corruption related cases pertaining to their organisations through the Commission’s website, thus speeding up the disposal of cases and reduction in pendency.

“In one case (of delay in finalising corruption case), we had to take unpleasant step of initiating disciplinary proceedings against the inquiry officer himself as to why he has delayed it so long.

“Is there a genuine reason or it is just negligence or there is any malafide. This is bound to produce a lot of good results. But of-course it is going through much more work at the Commission. There is awareness among the CVO as well as the officer in CVC that we need to live up to the timeline set,” he said.

The prime focus of the Commission is to curb the pendency of cases. The number of cases pending sanction for prosecution (for more than four months) were 28 as on June 20, 2015 which were reduced to 15 as on August 31, thus coming down to half within two months, Chowdary said.

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