Bank of Baroda will no longer operate in South Africa

The Bank of Baroda (BoB), which is embroiled in controversial banking transactions involving the embattled Gupta family, will no longer operate in South Africa, the country’s central bank said today.

“The Bank of Baroda has notified the Office of the Registrar of Banks of its exit from South Africa,” the South African Reserve Bank (SARB) said in a statement, amidst the controversy surrounding the Guptas close links with embattled South African President Jacob Zuma.

“The Registrar, which is part of the South African Reserve Bank, is in discussions with the Bank of Baroda to ensure its orderly withdrawal from South Africa so that no depositor is disadvantaged,” it said in brief statement.

It added that the SARB would make no further comment on the matter.

There was no immediate comments from the local branch of the BoB.

The BoB opened its first branch here in 2007 after having run an office in the port city of Durban for a decade.

The Indian state-owned bank came under the scanner after it emerged in April 2016 as the only bank willing to do business with the Gupta brothers -- Ajay, Atul and Rajesh -- who are accused of involvement in alleged state capture through their closeness to President Zuma and his family members.

“Despite the cessation of the provision of services by the major local banks, the group continues to be serviced by a major Asian bank with a presence in South Africa, which bank has requested that the company not communicate their name in this update,” Oakbay Resources had confirmed in a statement released via the JSE at the time after all major South African banks closed their accounts.

The Guptas and Duduzane Zuma, the son of President Zuma, resigned as directors of the company shortly before the statement on the bank, in order to ensure that its over 5,000 employees would not be affected by non-payment of salaries.

Ajay and Atul were the co-chairs of Oakbay Investments, while Atul was the chair of Oakbay Resources and Energy.

When it came to light that the initially unnamed bank was the BoB, its decision was queried by regulators and political leaders.

The BoB issued a statement on its website to explain why it could not divulge details of the transactions involving the Gupta family.

“The client relationship which is subject matter of the media reports is sub-judice and the Bank is also bound by client confidentiality. It is also the policy of the Bank to not comment on speculative reports.

“The Bank, having due regard for all lawful requirements, remains committed to cooperate with the regulators for all enquiries in this connection,” it said in the statement at the time.

The Gupta family has been under pressure for the past few years for allegedly being very close to President Zuma and benefiting unduly from the government contracts through its companies in areas as diverse as mining and media.

The Guptas first settled in South Africa two decades ago from their Saharanpur ancestral home to cash in on the opportunities offered by the new democratic South Africa under Nelson Mandela.