Notice to Banks for Derivative Violations

The Reserve Bank of India has become stringent than ever or rather should we say that they have become more cautious. It has sent show cause notices to over 12 banks for violations of foreign exchange rules regarding the sales of derivative products. Banks seem to have violated derivative deals during the year 2007-2008.

Also further showing the way, RBI has decided to attach penalty claims for violations of such bulk deals. CBI has taken a step further and has recommended that the contracts be investigated by RBI and the Enforcement Directorate as it involved FEMA violations !!

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