India: BoB Money Laundering, RBI Tells all Banks to Conduct Internal Audit


January 31 2016

All public sector and private banks have been asked by the RBI to conduct a “thorough internal audit” and put the report before their respective audit committees, as part of the central bank’s efforts to check fraudulent foreign exchange transactions.

The move comes in the wake of irregularities that came to light last year in Rs 6,100 crore import remittances effected by Bank of Baroda’s Ashok Vihar branch here.

A circular has been issued to all scheduled commercial banks, advising them to conduct a thorough internal audit and place the report before audit committee of the board of the respective banks and to forward the summary of findings to RBI, the central bank said in reply to an RTI query filed by PTI.

The bank has since completed the internal audit and placed the report before its audit committee for directions. The Bank of Baroda has also selected a consultant to review its Know Your Customer (KYC), Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) policy and practises, to set up robust systems, the central bank said.

“They have also framed a policy for advance import remittance which covers system check points like cooling period of six months in respect of newly opened account, multiple transactions in a day for USD 100,000 and below, etc,” the RBI said.