BoI to appeal against BCCI penalty, banks on SBI verdict

Bank of India (BoI) is weighing higher provisioning in this fiscal against the possibility of a payout of around Rs 360 crore ($82 million) ...

Bank of India (BoI) is weighing higher provisioning in this fiscal against the possibility of a payout of around Rs 360 crore ($82 million) in a case relating to the collapsed Bank of Credit and Commerce International (BCCI).

A UK High Court judge Nicholas Patten, on March 19, ordered BoI to pay this amount as a compensation in the world’s biggest banking fraud.

BoI Chairman and Managing Director M Venugopalan said that BoI would appeal against the ruling and that the bank is in the process of taking legal help in this matter.

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‘‘We are going to appeal against this judgment. Earlier, State Bank of India (SBI) has proved innocent. So we are also optimistic on this,’’ Venugopalan, who is now in Kolkata, told The Indian Express over telephone.

‘‘There would be no impact on bank’s profitability this fiscal. This is early to comment on anything else, because we have to sit and discuss the issue at length,’’ the chairman said.

‘‘We could make small provision against this possible pay out as a prudent step,’’ he said, adding that nothing has been decided yet. ‘‘The case could take another six months. So, it is unlikely to hit the bank’s profitability this fiscal. In any case, our operating profit last fiscal was over Rs 2,000 crore. So there would not be much impact on this front,’’ Venugopalan said.

Bank of India made a net profit of Rs 851 crore for the fiscal 2002-03 and its total assets were worth 76,000 crore.