Bank Of Baroda Stayed Silent On Rotomac Fraud For 2 Yrs; Approached CBI Only After PNB Scam

Bank of Baroda (BoB) remained silent for two years over the Rotomac case and approached CBI after the Nirav Modi case rattled the country’s banking industry. According to a report by The Times of India, in 2015, BoB had classified Rs 435 crore loan given to Vikram Kothari, owner of Rotomac, as Non-Performing Asset (NPA). Later in 2017, the loan was classified as ‘fraud’. But the bank informed the investigating agency only after the Punjab National Bank scam came to light. CBI has said that the bank should have approached them in 2015 when they have noticed the fraud.

“Since this account (Rotomac) is of high value in this fraud case, we apprehend that directors/guarantors of the company may escape from the country to skip the legal/criminal proceedings,” said the bank’s complaint.

Rotomac scam

Rotomac scam came to light after the Nirav Modi-PNB scam. Vikram Kothari, owner of Rotomac pens and his family members are the accused of Rs 3,965 crore fraud. It was also found that the loans sanctioned to Kothari for importing wheat were moved to Rotomac and its sister companies.

Kothari refused to call it a scam and said: “First of all, don’t call it a scam. Also, I am not leaving the country and I am very much in Kanpur. Banks have declared my company Non-Performing Asset (NPA), but not a defaulter. The matter is still sub judice with National Company Law Tribunal (NCLT). I have taken loans and will repay it all soon.”

Bank of Baroda Forex scam

Bank of Baroda had faced Rs 6,172 crore forex scam in 2015 where money was sent from India to Hong Kong to import cashew nuts, pulses, and rice, but the importing had not taken place and the money was allegedly deposited in 59 accounts of various firms, The Times of India reported. CBI arrested the bank’s assistant manager and the head of the forex division who were related to the fraud. The agency had registered a case against 59 account holders after conducting raids at Bank’s Delhi branch.

Forex refers to the market in which currencies are traded. It includes all the currencies in the world. The forex market is open five days in a week except for holidays and works 24 hours. Forex transactions can take place either on spot or on a forward basis. Spot deal is used for immediate delivery which will be carried out within 2 business days for most currency pairs. Transactions that settles for a date later than the spot transaction is called forward transactions.