Vanguard Bank Sweep & Bank of Baroda

[yogibearbull]

Bank of Baroda (#2 in India) is on Vanguard Bank Sweep List. While those funds may be FDIC insured (unclear if clear fraud or theft), this news about possible theft/fraud by employees is alarming. Apparently, Bank has a new app and the Bank was pushing its use aggressively. So, for the accounts that didn't have mobile phones associated with them, the Bank employees just entered their own or relatives'/friends' mobiles. While not many cases of abuse have been reported, this opens lots of potential fraud possibilities. Reserve Bank of India (RBI; like the Federal Reserve here) has imposed some penalties on the Bank.

www.newindianexpress.com/business/2023/oct/12/bank-of-baroda-associates-stole-funds-from-hundreds-of-accounts-via-mobile-app-says-report-2623275.html

personal.vanguard.com/pdf/Bank_Sweep_Participating_Banks.pdf

[anitya]

If I read it correctly, the Bank of Baroda with the fraud is not in the US branch of the bank. Interestingly, this bank operates in the US as a branch of the India based bank. Many foreign banks operate in the US as a subsidiary (incorporated in the US) of the foreign parent bank.

yogibearbull, My sweep account at VBS is their federal MM fund. Is the Bank Sweep list applicable to those participating in VBS cash management services? VBS offered that service but I did not bother to participate.

[yogibearbull]

Vanguard now selectively offers Vanguard Cash Plus among its core/settlement funds.
investor.vanguard.com/investment-products/vanguard-cash-deposit

Program uses multiple banks to insure up to $1.25/2.50 million by putting no more than $250K in any one FDIC covered bank. It looks like in-house version of commercial IntraFi (old CEDARS).
personal.vanguard.com/pdf/Bank_Sweep_Participating_Banks.pdf

Bank of Baroda's US operations may be under different regulations or joint regulations. The story is about the parent Bank of Baroda and one may deduce from it the work culture. This may be like the problems of Wells Fargo in the US that seem never to end.