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The article ‘Will the RBI probe and unravel the derivatives scam?’ (Business Line, July 5), will perhaps prompt the RBI to take immediate action to uncover the extent of the derivatives transactions. It was an interesting and well-documented article, bringing out the fraudulent aspect of the deals.

What should have been used as risk protection has been misused for speculative purpose.

High-end finance professionals seem to have re-engineered speculative products to lure people into unlawful transactions, to make a quick buck through fee-based income.

This appears to have led the innocent but, no doubt, greedy businessmen into a financial trap from which they are finding it difficult to extricate themselves.

Marketing of undeliverable financial derivative products purely on betting and speculative terms caused the whole scam in derivatives. The RBI should come out with suitable guidelines for such transactions, with stringent penalty clauses.

R. S. Raghavan Bangalore

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