BoB: RBI may invoke bilateral pact for info from Hong Kong

RBI scanner on loopholes in systems at BoB

The Reserve Bank of India (RBI) might invoke provisions under bilateral agreements to secure information from regulators in Hong Kong on alleged irregularities in foreign exchange transactions at a Bank of Baroda (BoB) branch in New Delhi.

“RBI has regulatory and supervisory cooperation agreements with a number of authorities. When the time is appropriate, when we have looked into things and when we consider it necessary and appropriate, we will certainly invoke all provisions which are at our command,” RBI Deputy Governor S S Mundra told reporters on the sidelines of an event here.

Asked whether the regulator would invoke such provisions in the BoB case, Mundra said, “It will happen. It will happen if there is a need.”

On whether loopholes in the system had led to the BOB episode, he said, “How controls are imposed and how good is the oversight is something that has to be looked into in greater detail. RBI is already looking into it.”



Public sector lender BoB’s Ashok Vihar branch in New Delhi had secured permission to carry out foreign exchange transactions in 2013. Within a year, foreign exchange business at the branch soared to Rs 21,529 crore. On noticing this, the bank alerted government agencies. Subsequently, the Central Bureau of Investigation and the Enforcement Directorate carried out raids at some BoB branches, as well as the residences of a few employees. These were in connection with alleged illegal remittances of Rs 6,172 crore to Hong Kong between August 1, 2014, and August 12 this year.