ArmenT wrote:kenop wrote:The Pakibanks should be mandated to do transactions only in USD if they are indeed allowed to enter the sector. Do not know if they have tried their hand at faking USD in the past.
They've been there and done that. See
Bank of Credit and Commerce International which was described as "the biggest bank fraud in world financial history" by one district attorney. They didn't need to print fake dollars (or fake euros or whatever). All they had to do was claim that only yesterday, a rich (and non-existent) sheik in their Abu Dhabi branch had deposited X gold bars. The whole thing was a gigantic ponzi scheme and the bank became infamous for fraud and currency manipulation. At one point, the bank had lent 3x their capital to a single pakjabi family alone, who were good friends with the bank president. See this
congressional report for details. The gory details start at chapter 4.
kenop wrote:I am sure they'll find some new innovative way to create another scam.
My concern was about FICN that would most likely be high on their agenda.
The BCCI was more of regular money laundering in the drugs supply chain. Terror funding (not the way understood today, which seems only to mean directly hitting western interests) was a side effect. Had CIA angle too (through BoA).
When Manmohan was RBI Governor he first objected but then allowed BCCI into India inspite of warnings about their criminal connections.
Now again he is allowing pakistani banks into India to facilitate narco-terrorists to launder their money.
Instead of responding to the queries of MP's manmohan singh ran away.
See this
http://parliamentofindia.nic.in/ls/lsde ... 070891.htm
07.08.91 *t13
STATEMENT BY MINISTER
Affairs of Bank of Credit and Commerce International (Overseas) Limited Bombay branch (BCCI)
THE MINISTER OF FINANCE (SHRI MANMOHAN SINGH):
The Bank of Credit and Commerce International (Overseas) Limited (incorporated in Grand Cayman), a wholly owned subsidiary of Bank of Credit and Commerce International Holdings (Luxembourg) submitted an application to Reserve Bank of India (RBI) in April, 1977 for opening two branches in India. However, BCCI was permitted by Reserve Bank of India to open only a representative office in June, 1977.
Representative Offices are not permitted to do any banking business but function only as a liaison office.
BCCI, however, pursued its request for establishment of branches in India. Reserve Bank of India issued a licence in February, 1983 for opening one branch in Bombay. The branch commenced its operation with effect from 31st March, 1983.
BCCI was involved in controversy in 1986 when investigations by Enforcement Directorate revealed that the bank was releasing foreign exchange against the Foreign Travel Scheme to travel agents without verifying the signatures of the actual travellers, with the result that a substantial amount of foreign exchange was released on the strength of the forms bearing forged and fake signatures. Some of the employees of the bank were detained under COFEPOSA Act. Subsequently four of these were related on the recommendation of the Advisory Board that heard the cases as provided in the COFEPOSA Act. Detention order of one employee was revoked by the Government on the ground that other employees had been released under similar circumstances. However, the case was adjudicated by Order dated 20-6-1988 imposing a penalty on the bank, its employees as well as travel agents and ordering confiscation of the seized exchange of US $1,32,00 as well as the Indian currency of Rs. 17,00,057 taken over from the bank. The Enforcement Directorate investigated the matter relating to irregular release of foreign exchange against Foreign Travel Scheme and the Directorate was not in possession of any evidence regarding use of such money for buying arms. Reserve Bank of India also deputed a special investigation team in January, 1987 to look into the matter and find out whether the seriousness of irregularities justified demands for cancellation of the licence of the bank. The inspection revealed that there were mainly procedural irregularities in foreign exchange operations and conduct of the bank in certain areas but such irregularities had also been observed in the case of other authorised dealers in India. This did not warrant revoking of licence.
There were also reports in 1988 from Intelligence Agencies that BCCI has made overtures for acquisition of property and is trying to enter the Hotel and real estate business in Lucknow and Bombay. The Intelligence Agencies viewed this as fraught with security risk.
..........
SHRI GEORGE FERNANDES: No, Sir. I am seeking a clarification from you. This statement has been cooking now for seven days and at the end of seven days, is this all that the Finance Minister has to tell us?
Why did it take him seven days to give us such a trash-if I may use that word if it is not unparliamentary. I would like to have an answer to this. They should not take this House for granted.
Does the Finance Minister want me to tell him? Can I ask the Finance Minister what he wrote on the file as the Reserve Bank Governor when this bank first asked for the licence? Did he say that this bank should not be given a licence? Then finally, the branch was allocated in Bombay at the instance of politicians. I shall not say so much because I would like you to name them. (Interruptions)
...................
SHRI SOMNATH CHATTERJEE (Bolpur): This is a very disquieting state, very unfortunate state. From the top, there is nothing in it.
Even the journals in all countries have made disclosures which are sensational. We wanted to know what is the information with regard to this. Does the Government of India know anything about this except what has been casually given to us? That is why, we are disturbed; we are feeling
418 Statement by Minister Affairs by B.C.C.I. (Overseas) Ltd., Bombay disturbed; the whole country is feeling disturbed.
There are sufficient hints that politicians are involved; MPs are involved; moneys are being utilised for purchase of arms; terrorists have been financed out of this. This is not a matter to be looked into or dealt with casually. Therefore, that is why we are objecting to it. The Finance Minister took time after time and postponed the date for making a statement like this! It is an exercise in utility. Any newspaper would give this. We expected that he would take the House into confidence instead of waiting for a discussion under Rule 193. He should have come forward and taken the House into confidence.
........
419 Statement by Minister Affairs by B.C.C.I. (Overseas) Ltd., Bombay SHRI SOMNATH CHATTERJEE (Bolpur): This is highly improper.
When the House is agitated on this issue, how can the Finance Minister go away from the House? (Interruptions)
SHRI BASU DEB ACHARIA: Where is your Finance Minister? The matter is very serious and for the last so many days we are asking for a detailed statement on the BCCI affair. He should not take the House for granted. (Interruptions)..........