Agha Hasan founded the bank of credits and Commerce international that came to be labeled as the bank of Crooks and Criminals International in the year 1972. The bank was initially registered in Luxembourg and had its Headquarters in Karachi. The bank grew very fast, and after operating for a decade, the bank had branches in more than 78 countries across the world. With this large number of branches and customer base, the bank rose to be the seventh largest private bank in the world. This paper will discuss the contribution made by this bank to the evolution of international banking.
In the 1980s the bank was subjected to some scrutiny and audits by the financial regulators due to the concerns that the bank was involved in significant financial fraud as it was poorly managed and regulated. This investigation reviled that the bank was engaged in massive money laundering practices and other major financial crimes that led to the bank illegally controlling the interests of major American Banks. This discovery led to the financial controllers raiding its branches in more than seven countries and locking down its records. Investigators realized that the bank had been operating while avoiding all the centralized regulatory reviews thus keeping its operations as secretive as possible. This level of complexity in its operations gave its officers and bankers an opportunity to engage in massive scale of financial fraud that stayed untraced for such an extended period.
BCCI expanded to Africa, and a year later, it grew to the Asia n economy. It was among the first foreign banks to operate in the in the Chinese special economic zone of Shenzhen. This led to China’s most established banks to make deposits with BCCI at the Shenzhen branch. The bank employed two auditing companies that are the Price Waterhouse and the Ernst & Young. But the bank was ordered by the bank of England to change its auditing system. That is when Price Waterhouse became the sole accountant of the bank.
The bank made most of its profits from the massive deposits made by oil-rich states who were the primary stakeholders of the bank. In addition to that, the bank was able to practice modern banking techniques that were not applicable at that time. This made it be able to operate several branches in different countries in the world. At one point the bank of England ordered the bank to maintain its branches at a maximum of 45 branches across Europe. The loaning portfolio was also modernized by the bank a factor that was criticized by many as it was alien to banking at that time. The loaning stem incorporated the interests on loans system a concept that is utilized highly by almost all banks of the modern era. The bank also practiced usury a practice that led to the bank making a lot of money from the Muslim merchants like the Gokal family that was notable in the shipping of magnets.
Regardless of the fact that the bank was later found to have committed a lot of financial fraud, it contributed a great deal to the evolution of banking. For instance, it was among the first banks to spread and start branches in almost every region in the world. It dared to venture into the most risk economies and thus stirred the development of international banking. In addition to that, the modern banks apply for its loans on interest concept. Virtually all banks charge interests on loans an aspect that is attributed to the BCCI bank. Other than the positive side, the bank’s involvement in fraudulent activities for a long time enabled the financial controllers to create and develop their laws and policies that have helped the modernization and evolution of international banking. The global financial controllers can prevent such a large-scale financial fraud as the done by BCCI
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