Bank of Baroda fraud: RBI Guv Raghuram Rajan says guilty will have to ‘pay the price’

Expressing concern over illegal Rs 6,000 crore transfer of funds through a Bank of Baroda branch, RBI Governor Raghuram Rajan said it will be pursued both by the central bank and investigative agencies to the “ultimate conclusion” to ensure that the guilty are made to “pay the price” for it.

He also said that if not pursued quickly, such frauds create an atmosphere of impurity which then breeds more such practices.

“We have created a whole new system for fraud alerts, fraud awareness amongst the banks. My hope is, going forward, we will pursue these frauds to the ultimate conclusion so that those who commit frauds do in fact pay the price for committing them.

“Otherwise if they are not pursued quickly and pursued to their logical conclusion, it creates an atmosphere of impurity, which then breeds more such practices,” Rajan told reporters after an RBI board meeting here. Replying to questions on the alleged scam, Rajan said “sharp practises were at work”.

“It does raise questions about fraud in the system, at this time we don’t know enough to allege one. What I am saying is generally,” he said.

Rajan said that it was very important that a message is sent that if there is deliberate laxity, deliberate violation of rules in order to give private gains to certain parties, they should be pursued both by the regulator and the law enforcement agencies.

“We have put up certain structures which will help them go forward,” he added.

Bank Of Baroda