Multiple Red Flags for Fraudulent Forex Transactions

Fraudulent forex transactions are being checked and monitored by the Reserve Bank of India and Indian Banks’ Association (IBA) in the wake of the alleged Rs 6,100 foreign remittance scam through the Bank of Baroda.

Vigilance Commissioner T M Bhasin told reporters that, “We have written to Reserve Bank of India (RBI) to say that if smaller forex transactions of less than one lakh dollars are being made than it should come to your notice.”

“There may be attempts to camouflage generation of alerts by sending small amount of money through multiple transactions of foreign exchange abroad. We have told RBI and IBA that they should tell banks to red flag transactions of smaller amount from one account,” he added.

Red Flag Alerts

Currently, red flag alerts are made only when the forex remittance are more than 1 lakh dollars.

Bhasin also told IBA to alert all member banks that they have to follow Know Your Customer and Anti-Money Laundering guidelines in order to prevent recurrence of fraudulent incidents.

Forex Scam

The recent forex scam that involves Rs 6,100 crore that were remitted to Hong Kong was said to be misusing Bank of Baroda. According to Bhasin, Enforcement Directorate has been told to check the matter to ensure that they aren’t fraudulent transactions.

After the BoB incident has been reported to the Central Vigilance Commission (CVC), there had been requests for evaluation of forex transactions to the CBI and ED.

After CVC was alerted, the Ashok Vihar branch of BoB was checked and evaluated by the CBI. The CBI conducted raids at about 59 places and some people were arrested. Investigation on the case is still ongoing, and is said to be going on a 24/7 basis.

“The Bank hasn’t lost any money,” says Bhasin who is the former Chairman and Managing Director of Indian Bank.

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