Bank of Baroda to exit South Africa amid probe over Gupta ties
Bank of Baroda, only lender in South Africa still offering services to companies linked to the Guptas, last year sought a court order that will allow it to close their accounts
Johannesburg/Mumbai: The Bank of Baroda plans to exit South Africa as it faces a probe by regulators about its dealings with the politically connected Gupta family.
The state-owned Indian lender is in talks with the South African bank regulator to ensure an orderly withdrawal that won’t disadvantage any depositors, the Pretoria-based registrar said in an emailed statement on Monday. The central bank has no further comment on the matter, it said.
Bank of Baroda’s retreat comes less than a week after the company confirmed South Africa’s central bank is probing historical transactions. Bank of Baroda, which is the only lender in South Africa still offering services to companies linked to the Guptas, last year sought a court order that will allow it to close their accounts. The Gupta family, who are friends of President Jacob Zuma and in business with one of his sons, have been accused by politicians and civil society groups of using that relationship to influence state contracts and cabinet appointments. Zuma and the family deny wrongdoing.
Chief executive officer P.S. Jayakumar said in an interview with BloombergQuint that the lender is talking to regulators around the world to reduce its presence in countries where it doesn’t see a strong business case to rather focus on larger markets where it can better serve new customers. He declined to comment on the Gupta allegations in the interview with the Indian TV venture, saying there are many factual errors in some of the reports. A Mumbai-based spokesman for Bank of Baroda didn’t immediately respond to an email and phone call seeking comment.
The bank was said to have transgressed its own rules by being significantly exposed to one client. The lender may hold as much as 1.75 billion rand ($146 million) on behalf of trusts for mines, linked to the Guptas, and by law that money must be used for environmental rehabilitation, according to the civil society group Organisation Undoing Tax Abuse. Bloomberg
- Paytm says never shared users’ data with third-parties, government
- Four years of Modi govt: Labour reforms slow down despite policy revamp
- Job creation still a challenge after four years of Modi govt
- Oil prices slump 3% as Opec and Russia consider output boost
- Oil prices drop below $80 vindicates cautious investors trimming bets
Editor's Picks »
- Motherson Sumi continues to face margin pressure in foreign markets
- What the Warren Buffett indicator tells us about market valuations today
- Jet Airways lands with a thud in Q4 as fuel costs increase
- IBC amendments: Some dilutions, and a lot more speed
- Patanjali’s gambit is paying off in toothpaste wars