Bank of Baroda picks E&Y to review KYC systems

Appoints strategic advisor for restructuring to help improve profitability

Public sector lender Bank of Baroda has appointed Ernst & Young to look into any gaps in its Know Your Customer (KYC) norms especially in international transactions side.

The need for review arose after an alleged violation of anti-money laundering (AML) norms was unearthed at the bank’s branch at Ashok Vihar, New Delhi. The Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) are also probing the case.

P S Jayakumar, its new managing director and chief executive who came on board in October 2015, had said then the bank was thinking of hiring an external accounting firm to look at its KYC policies and come up with a set of recommendations. This has been done to see if the issue was restricted to one branch or if it was a systemic problem.
 

A senior bank executive said the professional services firm (E&Y) is examining the system for international transactions for loopholes and weaknesses.

Jayakumar had said after taking charge that the bank was preparing an action plan to avoid such instances in the future. The goal was to introduce appropriate changes in processes, organisational structure and training so that such instances do not repeat.

Meanwhile, the bank has appointed Deepa P S as strategic advisor to Jayakumar. The strategic advisor would focus on developing business plans and procedures for corporate restructurings and joint ventures and coordinate with functional heads and stakeholders for improving business and profitability.

Executives of the bank said the aim was to appoint those with experience in multinational and private sector banks. Besides strategy, the bank will also hire adviors for risk function and business development.

Another advisor would assess risks associated with corporate credit, consumer & commercial/ price & market, apart from formulating and implementing policies to mitigate those risks for better management. Additionally, one advisor would advise top management on business development, relationship management, planning and risk and compliance-related issues.

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KEY TAKEAWAYS

• Need for review arose after alleged violation of anti-money laundering norms at the bank’s Ashok Vihar branch in New Delhi
  

 

Review to examine if issue was restricted to one branch or was a systemic problem
 

The bank has appointed Deepa P S as strategic advisor to help focus on developing business plans and procedures for corporate restructurings and joint ventures  
 

Bank to also hire advisors for risk function and business development