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The RBI has imposed penalties on 19 commercial banks for flouting instructions related to derivatives, said a press release issued here on Tuesday.
The banks that have been fined include six private sector banks, nine foreign banks and one public sector bank.
Amount levied
The fines range between Rs 5 lakh and Rs 15 lakh.
The private banks that have been fined are: Axis Bank, Rs 15 lakh; ICICI Bank, Rs 15 lakh; Kotak Mahindra Bank, Rs 15 lakh; YES Bank, Rs 15 lakh; DCB, Rs 10 lakh; and ING Vysya Bank, Rs 10 lakh.
State Bank of India is the only PSU bank in the list, and it has been fined Rs 10 lakh.
The foreign banks include: Barclays Bank, Rs 15 lakh; BNP Paribas, Rs 10 lakh; Citi Bank, Rs 10 lakh; Credit Agricole, Rs 10 lakh; Royal Bank of Scotland, Rs 10 lakh; Bank of America, Rs 5 lakh; DBS Bank, Rs 5 lakh; Deutsche Bank, Rs 5 lakh; HSBC, Rs 5 lakh; and JPMorgan, Rs 5 lakh.
According to the RBI, the penalties have been imposed on these banks for contravention of various instructions issued by the Reserve Bank in respect of derivatives.
Such as, 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.
Violations established
The RBI had issued show-cause notices to these banks. In response to this, the banks submitted their written replies.
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 release said.
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