State Bank To Move Belgian Court For Release Of Official

State Bank of India will move the Belgian courts next week seeking the release of an official working at its Belgium branch.

It is believed the official, who was arrested along with two others in a money laundering case, may have got caught between a business rivalry between Indian and foreign diamonds merchants.

Three SBI officials at the Belgium branch were arrested on the charge of abetting money laundering.

The chief executive officer of SBIs Belgian operations, T M N Singh and another official, are still in custody. They will be produced before the court in the next seven days.

 

Lawyers of State Bank of India plan will appeal against the arrest.

The investigations by the Belgian authorities into State Bank was initiated following a complaint filed by some foreign diamond merchants, alleging that their Indian counterparts indulged in money laundering through SBIs Belgian branch.

The Belgian branch handles less than two per cent of the diamond business.

Sources claim the money laundering complaint was contrived to keep the Indian merchants out of business. It is learnt the Indian diamond merchants have reportedly been outbidding foreign merchants in rough, as well as, finished diamonds.

The controversy revolves around the advance of $30 million through nearly 10 accounts to diamond merchants. For advancing the amount, the bank asked for a margin money of $7 million. But since the money was not with the merchants in Belgium, they gave a lien on their foreign currency deposit account in London.

The practice of giving a lien in a overseas account was barred by the Belgian authorities on January 1, 1997.