RBI penalises 19 banks for non-compliance of derivative norms
26 Apr 2011
The Reserve Bank of India (RBI) has imposed penalties on 19 commercial banks, including the State Bank of India, HDFC Bank and ICICI Bank, for contravention of various instructions issued by the central bank in respect of derivatives.
These include failure to carry out due diligence in regard to suitability of products, selling derivative products to users not having risk management policies and not verifying the underlying/ adequacy of underlying and eligible limits under past performance route.
The RBI said it has issued show-cause notices to these banks and the banks' replies have only established the violations and hence the penalties.
The RBI list included Axis Bank, Barclays Bank, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, BNP Paribas, Citi Bank, Credit Agricole-CIB, Development Credit Bank, ING Vysya Bank, Royal Bank of Scotland, Standard Chartered Bank, State Bank of India, Bank of America, DBS Bank, Deutsche Bank, Hongkong and Shanghai Banking Corporation and JP Morgan Chase Bank.
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