February 13—India’s Bank of Baroda is to exit the South African market in the wake of the Gupta family business shenanigans that have adversely affected the bank’s reputation and attracted close regulatory scrutiny.
During the past two years, the Guptas have become headline news due to their intricate and often shady business deals as well as their blatant influence peddling that has added to the woes of President Jacob Zuma who is set to step down imminently.
In a statement last week, the bank management said, ‘The Reserve Bank of South Africa (central bank) is investigating the allegations against Bank of Baroda and the bank is actively cooperating and supporting these investigations.’
However early this week, in an equally terse statement the Reserve Bank said, ‘The Bank of Baroda has notified the Office of the Registrar of Banks of its exit from South Africa. 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’.
Last year, Baroda was left holding the bag after South Africa’s four biggest banks, Standard, ABSA, First Rand (FNB), and Nedbank cut off all Gupta ties by closing their accounts. The family was forced to use, offshore companies. However Baroda was ordered by the High Court to temporary keep Gupta accounts open following a suit in which the family lawyers argued the closure would unfairly impact their businesses.
Sources say Baroda plans to cut finally up stakes and leave one of Africa’s deepest financial markets by the end of March. Other companies that have found themselves in tight spots because of the Gupta connection, have included Mckinsey (management consultants), Bell Pottinger (public relations), KPMG (financial services).