Banking Blues (IIPM)

Bank of Credit and Commerce International (BCCI) was a bank that was involved in every thing other than banking. It was a globalised network for scandals and sponsored terrorism, drugs trafficcking, money laundering and bribery. Established in Pakistan in the year 1972, the bank was incorporatedin Luxembourg. It was a perfect example of how a complex corporate structure can fox regulators and carry out sleazy operations. It followed a dual banking model with the Pakistan headquarters as its banking arm and the Luxembourg subsidiary a non-banking entity. But in the early nineties, BCCI was audited and asked to leave Luxembourg. Furthermore, discrepancies in its account led the New York district attorney and the Feds to investigate. In the year 1991, BCCI was found completely guilty and subsequently, was liquidated – taking with it $10 billion.

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Source IIPM-Editorial,2006