Bank of Baroda to shut down South Africa operation
MUMBAI: The Bank of Baroda has decided to shut down its operation in South Africa, a development that comes within months of the South African Reserve Bank imposing a fine of 11 million rand (about Rs 5.45 crore) for lapses in compliance.
The bank notified the South African Reserve Bank on Monday about its plan to exit the country.
"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," said a statement issued by the South African Reserve Bank.
The exit from South Africa could also be linked to the Bank of Baroda being a banker to the Gupta family of Indian origin who reportedly took undue advantage of its connections with South Africa's president Jacob Zuma. South African authorities have alleged that the bank transferred a large sum of money to the Zuma family, which is now under investigation.
In a statement last week the bank had said, "The Reserve Bank of South Africa is investigating the allegations against Bank of Baroda and the bank is actively cooperating and supporting these investigations."
In June last year, the banking regulator of South Africa had sought information on the financial transaction of Gupta family from banks. At that time, the Bank of Baroda continued to maintain banking relations with the Gupta family, while Standard Bank, Nedbank, First National Bank and Barclays Africa Group discontinued banking with the family. The Gupta family's businesses in South Africa range from information technology to engineering and mining.