RBI slaps Rs 1.95 cr penalty on 19 banks,including SBI, ICICI

Mumbai: The Reserve Bank today imposed a fine of Rs 1.95 crore on 19 banks, including leading lenders like SBI, HDFC Bank, ICICI Bank and Citibank, for violating regulations concerning derivatives.

"The penalties have been imposed on these banks for contravention of various instructions issued by the Reserve Bank in respect of derivatives," the RBI said in a release.

The lenders failed to carry out due diligence with regard to suitability of products and sold derivative products to companies not having risk management policies. They also failed to verify the adequacy of eligible limits before selling derivatives, RBI said.

While a fine of Rs 15 lakh each was slapped on Axis Bank, Barclays, HDFC Bank, ICICI Bank, Kotak Mahindra and Yes Bank, Rs 10 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.

Besides, a fine of Rs 5 lakh each was slapped on Bank of America, DBS Bank, Deutsche Bank, HSBC and J P Morgan Chase Bank.

RBI had earlier issued show-cause notices to them.

"On a careful examination of the banks¿ written replies and the oral submissions made during the personal hearings, the Reserve Bank found that the violations were established and the penalties were thus imposed," the central bank said.

Source: Financial Express