Reserve Bank probing Bank of Baroda after Outa allegations
While there is no clear evidence that mine rehabilitation funds were used as collateral or mismanaged, the Bank of Baroda may have breached its own rules
Bank of Baroda is being investigated by the Reserve Bank over money held for companies controlled by the politically connected Gupta family, according to a person familiar with the matter. The Reserve Bank’s probe, which comes after it fined Baroda in June for not doing enough to combat financial crime, was sparked after the Organisation Undoing Tax Abuse (Outa) alleged in court papers that mine rehabilitation funds held for two of the Gupta family’s companies had been mismanaged and used to repay loans, the person said. While there is no clear evidence that the trust funds were used as collateral or mismanaged, Bank of Baroda may have breached its own rules about having significant exposure to certain clients, said the person, who asked not to be identified because the matter is confidential. Bank of Baroda holds as much as R1.75bn on behalf of trusts for the mines and by law that money must be used for environmental rehabilitation, according to the civil society group known as Out...
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