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Key Points

Standard Chartered has downplayed RBI scrutiny over derivatives sales, calling it a routine examination. The central bank reportedly raised concerns about risky products sold to SMEs. The bank recently appointed P.D. Singh as CEO and expanded operations in GIFT City. It remains one of India’s oldest foreign banks with a 165-year presence.

Key Points: Standard Chartered Calls RBI Scrutiny Routine Amid Derivatives Probe

  • RBI flagged alleged derivatives sales to SMEs
  • Bank cites routine annual inspections
  • New CEO P.D. Singh reinforces India commitment
  • GIFT City expansion highlights long-term strategy
2 min read

Routine annual examination, says Standard Chartered over RBI scrutiny reports

Standard Chartered addresses RBI scrutiny over derivatives sales, calling it part of routine annual inspections while reaffirming commitment to India’s financial growth.

"While we don’t want to comment on specifics, observations, if any, are highlighted and addressed as part of the normal process. – Standard Chartered Spokesperson"

New Delhi, June 18

After reports surfaced that Standard Chartered is facing RBI regulatory scrutiny in India over alleged lapses in derivatives sales, the lender on Wednesday said the Reserve Bank conducts annual inspections of banks, and this is just part of a routine examination.

According to reports, the central bank raised concerns following alleged sales by the lender to small and medium-sized enterprises of target redemption forwards, "a product that can cause significant losses".

The RBI also raised issues regarding the bank’s maintenance of reserves and the accounting treatment of forward rate agreement trades in previous fiscals.

A Standard Chartered spokesperson told IANS that the Reserve Bank conducts an annual inspection of banks.

"While we don’t want to comment on specifics, observations, if any, are highlighted and addressed as part of the normal process," the spokesperson added.

The RBI was yet to react to the reports.

In February this year, Standard Chartered Bank appointed P.D. Singh as its chief executive officer (CEO) for India and South Asia, effective from April 1. Singh succeeded Zarin Daruwala.

In April, Standard Chartered Bank shifted to larger office premises at Gujarat International Finance Tec-City (GIFT) City, reinforcing its long-term commitment to India's premier international financial services hub.

"In line with the government's vision of Viksit Bharat, GIFT City is rapidly emerging as a critical gateway for international investors and institutions, looking to be a part of India's economic growth story,” said Singh.

Over the last couple of years, Standard Chartered Bank has invested significantly in capability building, involving product suite, talent and technology, across its corporate and institutional banking business.

Standard Chartered Bank is the first foreign bank to commence operations at GIFT IFSC and has played a pivotal role in its development. It currently offers the widest product bouquet to corporate and institutional clients across lending, trade finance, cash management, and financial markets.

Over the last two years, the funded assets at the Bank's GIFT City have grown by over 150 per cent while attaining market leadership in the derivative business.

Standard Chartered Bank has been operating in India with a continuous presence of over 165 years, making it one of the oldest foreign banks in the country. The bank has a network of 100 branches across 42 cities.

- IANS

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Reader Comments

Here are 5 diverse Indian perspective comments for the article:
R
Rahul K.
RBI should be extra vigilant with foreign banks operating in India. We've seen similar issues before where complex financial products were mis-sold to small businesses. Good that our regulators are keeping watch 👏
P
Priya M.
As someone who works in banking, I know these annual inspections are normal. But the timing is interesting - just when StanChart is expanding in GIFT City. Hope this doesn't affect India's growing reputation as a financial hub.
A
Arjun S.
165 years in India and still making mistakes? Come on StanChart! Our SMEs deserve better than risky derivatives. RBI should impose heavy penalties if violations are proven. Atithi Devo Bhava doesn't mean we tolerate financial misdeeds.
N
Neha T.
The growth at GIFT City is impressive but regulation must keep pace. Foreign banks bring expertise but also need to respect Indian rules. Balance is key for Viksit Bharat vision 🇮🇳
S
Sanjay V.
While the scrutiny is necessary, let's not jump to conclusions. Standard Chartered has contributed significantly to India's banking sector. Hope this gets resolved transparently without unnecessary panic in financial markets.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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