Is Standard Chartered Facing RBI Scrutiny Over Derivatives Sales?

New Delhi, June 18 (NationPress) Following reports that Standard Chartered is under regulatory scrutiny by the RBI in India due to alleged issues in derivatives sales, the bank clarified on Wednesday that the Reserve Bank regularly conducts annual assessments of banks, describing this as a standard procedure.

Reports indicate that the central bank expressed concerns regarding the lender's sales of target redemption forwards to small and medium enterprises, a product associated with the potential for significant losses.

The RBI also highlighted problems concerning the bank's reserve management and the accounting practices related to forward rate agreements in prior financial years.

A spokesperson for Standard Chartered informed IANS that the Reserve Bank performs annual inspections of banking institutions.

"While we refrain from discussing specifics, any observations are addressed during the standard review process," the spokesperson noted.

The RBI has not yet issued a response to these reports.

Earlier this year, in February, Standard Chartered Bank appointed P.D. Singh as its new CEO for India and South Asia, starting April 1, succeeding Zarin Daruwala.

In April, Standard Chartered Bank moved to larger office spaces at the Gujarat International Finance Tec-City (GIFT) City, reaffirming its long-term commitment to India’s leading international financial services hub.

"Aligned with the government’s vision of Viksit Bharat, GIFT City is swiftly becoming a vital entry point for international investors and institutions keen on participating in India’s economic growth," Singh commented.

Over the past few years, Standard Chartered Bank has made substantial investments in enhancing its capabilities, including its product offerings, talent acquisition, and technological advancements across its corporate and institutional banking divisions.

As the first foreign bank to establish operations at GIFT IFSC, Standard Chartered Bank has significantly contributed to its growth, currently providing the most extensive range of products to corporate and institutional clients in areas such as lending, trade finance, cash management, and financial markets.

In the last two years, the funded assets at the bank’s GIFT City location have surged by over 150%, achieving a leading position in the derivatives market.

Standard Chartered Bank has maintained a continuous presence in India for over 165 years, making it one of the oldest foreign banks in the nation, with a network of 100 branches across 42 cities.