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From: Ramachandran Mahadevan <ramachandran.mahadevan@gmail.com>
Date: Thu, Dec 22, 2011 at 5:36 PM
Moneylife » newsviewer » companies-sectors »
rbi-penalises-19-banks-for-flouting-derivative-norms-govt RBI
penalises 19 banks for flouting derivative norms: GovtDecember 21,
2011 08:25 AM | Moneylife Digital Team
The RBI had imposed penalties on 19 commercial banks for contravention
of various instructions issued by the central bank in respect of
derivatives such as failure to carry out due diligence in regard to
suitability of products and selling derivatives products to users not
having risk management policies
New Delhi: The Reserve Bank of India (RBI) has imposed penalties on 19
commercial banks, including SBI, HDFC Bank, ICICI Bank and Citibank,
for violating norms on derivatives, reports PTI.
The RBI has informed that it had imposed penalties on 19 commercial
banks on 26 April 2011, for contravention of various instructions
issued by RBI in respect of derivatives such as failure to carryout
due diligence in regard to suitability of products and selling
derivatives products to users not having risk management policies,
minister of state for finance Namo Narain Meena said in a written
reply in the Rajya Sabha.
RBI has issued show-cause notices to banks. In response to this, banks
submitted their written replies, he said.
"On a careful examination of the banks' written replies and the oral
submissions made during the personal hearings, the RBI found that the
violations were established and the penalties were thus imposed," he
said.
While a fine of Rs15 lakh each was slapped on Axis Bank, Barclays,
HDFC Bank, ICICI Bank, Kotak Mahindra and Yes Bank, Rs10 lakh each was
imposed on Citibank, BNP Paribas, SBI, Credit Agricole -CIB,
Development Credit Bank, ING Vysya Bank, Royal Bank of Scotland and
Standard Chartered Bank, he said.
Besides, a fine of Rs5 lakh each was slapped on Bank of America, DBS
Bank, Deutsche Bank, HSBC and J P Morgan Chase Bank, he added.
Mr Meena also said that RBI has informed that the estimated loss of
Rs33,000 crore in the foreign exchange derivative transaction may not
be the actual losses but the gross Market to Market (MTM) gains or
losses to the customers.
MTM gains or losses are basically an accounting concept wherein the
financial institutions would record the value of outstanding financial
contracts at fair value while preparing financial statements, he added
--
CA Ramachandran Mahadevan,M.Com.,F.C.A.,
I-708,Mantri Tranquil,Subramanyapura Post,
Bangalore-560061
Karnataka,India.
+91 80 42011024
From: Ramachandran Mahadevan <ramachandran.mahadevan@gmail.com>
Date: Thu, Dec 22, 2011 at 5:36 PM
Moneylife » newsviewer » companies-sectors »
rbi-penalises-19-banks-for-flouting-derivative-norms-govt RBI
penalises 19 banks for flouting derivative norms: GovtDecember 21,
2011 08:25 AM | Moneylife Digital Team
The RBI had imposed penalties on 19 commercial banks for contravention
of various instructions issued by the central bank in respect of
derivatives such as failure to carry out due diligence in regard to
suitability of products and selling derivatives products to users not
having risk management policies
New Delhi: The Reserve Bank of India (RBI) has imposed penalties on 19
commercial banks, including SBI, HDFC Bank, ICICI Bank and Citibank,
for violating norms on derivatives, reports PTI.
The RBI has informed that it had imposed penalties on 19 commercial
banks on 26 April 2011, for contravention of various instructions
issued by RBI in respect of derivatives such as failure to carryout
due diligence in regard to suitability of products and selling
derivatives products to users not having risk management policies,
minister of state for finance Namo Narain Meena said in a written
reply in the Rajya Sabha.
RBI has issued show-cause notices to banks. In response to this, banks
submitted their written replies, he said.
"On a careful examination of the banks' written replies and the oral
submissions made during the personal hearings, the RBI found that the
violations were established and the penalties were thus imposed," he
said.
While a fine of Rs15 lakh each was slapped on Axis Bank, Barclays,
HDFC Bank, ICICI Bank, Kotak Mahindra and Yes Bank, Rs10 lakh each was
imposed on Citibank, BNP Paribas, SBI, Credit Agricole -CIB,
Development Credit Bank, ING Vysya Bank, Royal Bank of Scotland and
Standard Chartered Bank, he said.
Besides, a fine of Rs5 lakh each was slapped on Bank of America, DBS
Bank, Deutsche Bank, HSBC and J P Morgan Chase Bank, he added.
Mr Meena also said that RBI has informed that the estimated loss of
Rs33,000 crore in the foreign exchange derivative transaction may not
be the actual losses but the gross Market to Market (MTM) gains or
losses to the customers.
MTM gains or losses are basically an accounting concept wherein the
financial institutions would record the value of outstanding financial
contracts at fair value while preparing financial statements, he added
--
CA Ramachandran Mahadevan,M.Com.,F.C.A.,
I-708,Mantri Tranquil,Subramanyapura Post,
Bangalore-560061
Karnataka,India.
+91 80 42011024
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