Case Brief
The Reserve Bank of India imposed penalties on 19 commercial banks under Section 47A(1)(b) read with Section 46(4)(i) of the Banking Regulation Act, 1949. RBI said the banks contravened various instructions on derivatives, including failures to carry out due diligence on product suitability, selling derivative products to users without risk management policies, and not verifying the underlying/adequacy of underlying and eligible limits under the past performance route. After show-cause notices, written replies, and personal hearings, RBI concluded that the violations were established and imposed penalties on the named banks.
Action Snapshot
- Primary Impact