London: Public sector Bank of India (BOI) was today (Mar 19, 2004) ordered by London's High Court to pay a compensation of whopping $ 82 million for fraudulent transactions with a bank with Pakistani links that had collapsed in early 1990s.

Judge Nicholas Patten awarded the damages, saying BOI's then London-based manager K L Samant knew that transactions were being entered into with the Bank of Credit and Commerce International (BCCI) for a fraudulent purpose.

In the BCCI's insolvency case filed by liquidators, the judge said BOI was responsible for the conduct of Samant, who entered into back-to-back loan arrangements, which were aimed at concealing BCCI's serious bad debts and losses from its creditors.

He said BOI must bear the responsibility for the action of its manager who was negligent in his duty. Samant has since retired and has settled down in London.

The original sum involved was $ 43.2 million, which with interest comes to about $ 82 million.

BOI chairman and managing director M V Venugopalan when contacted in Mumbai said the bank would go for an appeal.

"The bank is yet to get the copy of the order but we will go in appeal," he said.

Venugopal said the impugned transactions pertained to 1981-85 period.

Set up in early '70s by Pakistani banker Agha Hassan Abedi, BCCI grew into a big empire with an asset of $ 20 million before it collapsed in 1991.