India Markets closed

Bank of Baroda To Exit South Africa, Confirms Country’s Central Bank

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

Bank of Baroda will exit the South African market amidst allegations that a prominent political family used the lender’s network for illicit transactions.

In a statement issued on Monday, the South African central bank said that Bank of Baroda has informed it of the plan to exit. The central bank added that the exit would be handled in a manner that no depositor is disadvantaged.

"The Bank of Baroda has notified the Office of the Registrar of Banks of its exit from South Africa. 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 South Africa so that no depositor is disadvantaged." - South African Reserve Bank Statement

South African authorities alleged that the influential Gupta family used Bank of Baroda’s banking facilities to transfer large sums of illegal money and influence President Jacob Zuma and his family. In November, Bloomberg News reported that the South African central bank is investigating Bank of Baroda.

“We would not like to comment on anything until the investigation is over. I can tell you that there are many factual inaccuracies in the reports which are emerging,” PS Jayakumar, managing director and chief executive officer of Bank of Baroda told BloombergQuint in an interview over the weekend..

A lot of the problems in South Africa are legacy issues from 2010-2012, Jayakumar said. Since 2015, he said, the bank has made significant efforts to improve compliance through stronger KYC (know your customer) norms and other anti-money laundering norms. It would be unfair to use the KYC compliance standards of today to measure issues that cropped up back then, Jayakumar added.

Also Read: Bank Of Baroda Considers Trimming International Operations

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

. Read more on Business by BloombergQuint.