StanChart Under RBI Scrutiny Over Derivative Sales to SMEs
Why in the news
Sources said Standard Chartered drew the Reserve Bank’s attention after supervisors noticed shortcomings in how the bank sold derivative products.
Key facts
- Bank in focus: Standard Chartered.
- Regulator: Reserve Bank of India (RBI).
- Issues found: lapses in derivatives sales and problems in the bank’s risk controls.
- Trigger: sales of target redemption forwards to SMEs, a product that can cause significant losses.
| Item | Detail |
|---|---|
| Product | Target redemption forward (derivative) |
| Buyers | Small and medium enterprises |
| Risk | Heavy losses possible |
Exam angle
- Question type: which regulator examined a foreign bank’s derivatives mis-selling.
- Related terms: derivatives, risk controls, SME customers.