In an interesting move, the UAE Central Bank has imposed a sanction of AED 6,833,333.00 (amounting to $1,860,676 approx.) on Bank of Baroda, GCC Operations, Dubai for violating anti-money laundering laws.
The state-owned Indian bank reportedly failed to comply with UAE Federal Decree Law no (20) of 2018 on Anti Money Laundering and Combating the Financing of Terrorism. Bank of Baroda has said it is taking steps to improve compliance but is also reserving its option to appeal this sentence.
Unfortunately, the rare UAE Central Bank sanction notices, being rather short and devoid of crusty details, make it a bit hard to assess what Bank of Baroda did exactly to warrant an exceptional fine from the UAE Central Bank (this particular sanction notice has yet to be published on their site)
However, a quick check on its history will tell us that Bank of Baroda is no stranger to financial crimes. In a prior 2018 case, the bank was fined 90 million rupees (approx. $1,232,292) by the Indian Financial Intelligence Unit (FIU) for breaching anti-money laundering norms and for failing to report suspicious transactions.
The FIU accused the bank of failing to detect wrongdoing and instances of money laundering at its branch Ashok Vihar, New Delhi, where a massive forex remittance scam was uncovered in 2015. The scam did involve illegal remittances to Hong Kong and Dubai between August 2014 and August 2015 (could this case be linked to our present UAE Central bank sanction?). Six people were arrested including employees of Bank of Baroda and HDFC Bank in what is now known as the Forex scam. The bank failed to have a system in place for detecting and reporting suspicious transactions and failed to carry out client due diligence, the FIU said.
In South Africa, the DA laid charges of money laundering and corruption against the Bank of Baroda, accusing it of providing banking services to the controversial Gupta family, who ironically elected domicile in Dubai (could the UAE Central bank case be linked to this case?)The bank was put under the microscope after it emerged in April 2016 as the only bank willing to do business with the Gupta brothers, today accused of involvement in alleged state capture corruption through their closeness to President Zuma and his family members. The bank is accused to have knowingly laundered money on behalf of the Gupta family.
Bank of Baroda denied the accusations and will no longer operate in South Africa. It is still unclear where this case stands today (to be followed).
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