In a stock exchange notification on Monday, the bank said that the move followed an internal audit by the RBI and investigative agencies in October 2015, which pointed to the weaknesses mentioned above. A foreign exchange scam was unearthed at Bank of Baroda and a number of public and private sector lenders were found to be affected by it.
In January, the central bank had asked all public and private sector lenders involved in the matter to conduct internal audits and present a report to their audit committees.
Bank of Baroda has implemented a comprehensive corrective action plan, to strengthen internal controls and to ensure that such incidents do not recur, it said in the notification.
In October 2015, the Central Bureau of Investigation (CBI) conducted raids across bank branches, including those of Bank of Baroda and HDFC Bank, as part of a foreign exchange scandal, where bank employees had liaised with certain people to illegally transfer funds to various accounts in Hong Kong and the UAE, flouting foreign exchange norms set by the RBI.
Bank of Baroda’s Ashok Vihar branch in New Delhi was central to the entire racket, where according to the CBI, over Rs.6,000 crore worth of funds were transferred illegally.