Bank of Baroda pulls out of South Africa
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Bank of Baroda pulls out of South Africa

Updated: 09:15 13-02-2018

The Reserve Bank announced on Monday that the Bank of Baroda had notified the Office of the Registrar of Banks of its exit from SA.

"The registrar, which is part of the South African Reserve Bank (SARB), is in discussions with the Bank of Baroda to ensure its orderly withdrawal from SA so that no depositor is disadvantaged. At this stage, the SARB has no further comments on the matter," the Bank said in a statement.

The Bank of Baroda is India’s second-largest bank. Its South African office had provided banking services to the Gupta brothers, including claims of a mortgage for one of Jacob Zuma’s wives.

At the end of 2017 the bank moved to close the Guptas’ accounts — months after the family and their businesses had lost their other accounts held at SA’s big banks.

The bank’s exit from SA comes soon after the Reserve Bank finalised an inspection of the bank’s money-laundering controls. It also follows a move by the Asset Forfeiture Unit (AFU) to obtain a preservation order freezing more than R110m held at the bank.

In an explosive affidavit submitted in support of the preservation order in December, AFU financial investigator Nkosiphendule Mradla said the frozen R110m was the proceeds of crime, as it had come from a total R220.2m paid by the Free State department of agriculture to Estina, a firm associated with Atul Gupta, for their controversial dairy farm project in Vrede.

The AFU had also targeted the Bank of Baroda as it believed it was highly likely the funds would be moved offshore if the bank succeeded in closing the Guptas’ bank accounts, making repatriation impossible.

Along with the R10m fine levied after the inspection, the Reserve Bank slapped the Bank of Baroda with a directive, which its South African head, Manoj Kumar Jha, described as the most severe sanction the regulator could impose before restricting or suspending a bank’s business.

Source: Business Day Published: 12:30 12-02-2018

Posted by on February 12, 2018.

Categories: Business

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Updated: 22:37 21-May-2018

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