Bank of Baroda is cooperating with the South African Reserve Bank on the latter's probe into the Indian lender's controversial dealings with the politically connected Gupta family.
The bank clarified Feb. 6 a same-day report from Hindustan Times regarding its ties to the Indian family who are alleged to have used their relationship with South Africa's President Jacob Zuma to gain access to lucrative state contracts.
A footnote in the lender's quarterly results statement in June 2017 showed that it paid a penalty of 54.5 million rupees levied by South Africa's central bank. This suggested the bank's involvement in the country's "State Capture" scandal concerning allegations of potentially illicit ties between the Guptas and Zuma, the publication noted.
The Gupta family has sued Bank of Baroda after it ended their ties via account termination notices, the Hindustan Times noted, though the lender still holds at least 35 accounts tied to Gupta-linked companies.
The bank said in its statement that it was "actively cooperating and supporting" investigations, adding that some matters are being considered by the courts, including an appeal against a fine of 50 million rupees. It further noted that many of the allegations involve "historical transactions."
The South African Reserve Bank also fined Bank of Baroda 11 million rand in September 2017 for breaching anti-corruption and anti-money laundering rules when it helped the Gupta family purchase a coal mine.
As of Feb. 6, US$1 was equivalent to 64.26 Indian rupees and 12.04 South African rand.
