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FDI in Retail will affects farmer?

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The Reserve Bank of India (RBI) has imposed penalties on 19 commercial banks, including State Bank of India (SBI), HDFC Bank, ICICI Bank and Citibank, for violating norms on derivatives, the Parliament was informed today.

The RBI has informed that they had imposed penalties on 19 commercial banks on April 26, 2011, for contravention of various instructions issued by RBI in respect of derivatives such as failure to carryout due diligence in regard to suitability of products and selling derivatives products to users not having risk management policies, Minister of State for Finance Namo Narain Meena said in a written reply in the Rajya Sabha.The RBI has issued show-cause notices to banks. In response to this, banks submitted their written replies, he said.

“On a careful examination of the banks’ written replies and the oral submissions made during the personal hearings, the RBI found that the violations were established and the penalties were thus imposed,” he said.
While a fine of Rs 15 lakh each was slapped on Axis Bank, Barclays, HDFC Bank, ICICI Bank, Kotak Mahindra and Yes Bank, Rs 10 lakh each was imposed on Citibank, BNP Paribas, SBI, Credit Agricole-CIB, Development Credit Bank, ING Vysya Bank, Royal Bank of Scotland and Standard Chartered Bank, he said.

Besides, a fine of Rs 5 lakh each was slapped on Bank of America, DBS Bank, Deutsche Bank, HSBC and JP Morgan Chase Bank, he added.Meena also said that RBI has informed that the estimated loss of Rs 33,000 crore in the foreign exchange derivative transaction may not be the actual losses but the gross Market to Market (MTM) gains or losses to the customers.

MTM gains or losses are basically an accounting concept wherein the financial institutions would record the value of outstanding financial contracts at fair value while preparing financial statements, he added.

Source by Business Standard

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