Bank of Baroda’s South African unit has reportedly started closing accounts of companies controlled by the controversial Gupta family.
Bloomberg news agency reported on Thursday that according to three sources close to the matter, the Indian state-owned bank is winding down its link with companies associated with the politically exposed family in order to comply with banking rules.
Already the country’s four major banks have severed ties with the family’s investment holding company, Oakbay Investments, at the beginning of last year, resulting in a public spat between the family and Finance Minister Pravin Gordhan over his high court application seeking protection from the family, and an order declaring that the executive has no power to intervene over the matter with the banks.
The local banks also cited the need to comply with international banking rules.
The move by the Bank of Baroda could possibly leave the Guptas without banking facilities in the country, the report stated.
Oakbay Investments has reportedly denied any knowledge of the decision by Baroda to close its accounts.
“Oakbay is not aware of any such information,” the company said in an emailed response to questions. “I can only imagine that your source has their own agenda and wants to put pressure on Bank of Baroda,” the company is quoted as saying.
In his October 2016 application, Gordhan named 72 “dubious and unusual” transactions by the Guptas totalling R6.8 billion that were flagged by the Finance Intelligence Centre (FIC).