Bank of Baroda's Nassau branch denies involvement in transfer of Dawood funds

New Delhi: The Nassau branch of Bank of Baroda in Bahamas has denied any involvement in the alleged transfer of Dawood Ibrahim's funds.

The bank's statement came a day after a CNN-IBN and Firstpost investigation found that Dawood's cash was washing up in the offshore banking haven of Nassau in The Bahamas - a beach paradise also known for its zero-taxes and high-secrecy banking - in a Bank of Baroda branch. ( Read the detailed report here).

"In response to some of the news items appearing in TV channel regarding the purported transfer of funds through Bank of Baroda, Nassau Branch, Bahamas, it is clarified that Bank of Baroda, Nassau has been maintaining among others, the account of Dubai Exchange for last several years. It is a KYC Compliant account where transactions takes place in normal course of business to established banking channels," said the bank in its statement.

 Bank of Barodas Nassau branch denies involvement in transfer of Dawood funds

Cash from Afghanistan-Pakistan based terror groups, being handled by Dawood, has been traced to The Bahamas and is lying at the Nassau branch of Bank of Baroda

"All AML guidelines are followed. Hence we deny any involvement of Bank of Baroda in alleged transfer of funds as reported in the Media. We further clarify that Bank of Baroda, Nassau Operations are conducted strictly within the regulatory framework of host/home country and are subject to usual systemic controls," it added.

Responsible for the 1993 blasts in Mumbai, Dawood is India's most wanted terrorist and is said to be living in Karachi under the patronage of the Pakistan army. US has designated him a global terrorist and has even frozen his assets in the country.

Cash from Afghanistan-Pakistan based terror groups, being handled by Dawood, has been traced to The Bahamas and is lying at the Nassau branch of Bank of Baroda. Highly-placed government sources told Firstpost the Bank of Baroda's Nassau branch saw successive wire transfers of several hundred thousand dollars from at least three Dubai-based currency exchanges - the al-Zarouni Exchange, the Dubai Exchange and the al-Dirham Exchange - suspected to be proceeds from organised crime.

The Al-Dirham exchange is named in an Indian government dossier on Dawood Ibrahim's operations. The Bank of Baroda's Nassau branch did not respond to an e-mail from Firstpost. Government sources said, "From the bank's point of view, they are doing nothing illegal, or even wrong. But the government is worried about the money and where is it going from Nassau". "They are highly transnational, they move billions of dollars annually, and service a wide range of clients from corrupt officials, to drug traffickers to terrorists," said Gretchen Peters, Transnational Crime Expert.

Dawood, as the investigation reveals, has emerged as the principal provider of financial services to narcotics traffickers and jihadists across South Asia - a business pegged at over $3.5 billion a year, which uses front companies to access the global financial system. New Delhi had provided Islamabad with the dossier in 2011, naming at least 11 United Arab Emirates-based entities controlled by Dawood's crime cartel.

"Ibrahim is highly embedded in the system," Sushant Sareen, an analyst at the Institute for Defence and Strategic Analyses, said. "Say, there is a General's son who needs his studies at an elite American university paid for, or a politician who is in financial trouble-well then Bhai can help," Sareen said.

Dawood's operations matter to Pakistan as well. Laundered money remitted back into Pakistan is boosting the economy. In 2012, remittances jumped to over 10 billion dollars. The Karachi stock exchange gained 49 per cent in 2012, fuelled by Dawood, say experts.

"I think it's because he is part of the jihadi network which is linked to the Pakistani defence establishment," said Ayesha Siddiqa, Defence Analyst, Islamabad. "He bankrolls a lot of things, and therefore he continues to have a value," she added.

Clearly the US led fund squeeze on terror money and terror fund managers like Dawood and India's efforts to pressure Pakistan on the ganglord is not working. The Dawood empire seems to be flourishing.

Updated Date: Dec 20, 2014 18:37:11 IST