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Business News/ Companies / India to seek HSBC, Stanchart details from UK regulator
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India to seek HSBC, Stanchart details from UK regulator

India to seek HSBC, Stanchart details from UK regulator

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London: The Reserve Bank of India (RBI) and other Indian agencies are seeking details from British financial regulator Financial Services Authority (FSA) about two UK-based global banking giants HSBC and Standard Chartered whose outsourcing of key oversight jobs to India has come under the US scanner in separate probes related to issues such as money laundering and terror financing.

Sources close to the development said Indian financial sector authorities have started gathering all possible details about the two banks and any possible lapse in their compliance with regulations against money laundering and terror financing.

As part of this exercise, banking regulator RBI would soon approach FSA, with which it had recently signed a new memorandum of understanding (MoU) for exchange of information and co-operation in surveillance operations, a senior official said.

Issues related to HSBC and Stanchart would be discussed at the next meeting of representatives of RBI and FSA, along with other supervisory developments and matters concerning various banks having operations in India and the UK, the official said.

A RBI spokesperson said the central bank does not comment on individual banks.

New York state’s key banking regulator, the Department of Financial Services (DFS), had accused Standard Chartered Bank of hiding about 60,000 secret transactions with the Iranian government, involving $250 billion, and exposing the US financial system to terrorists, weapons dealers and drug kingpins.

HSBC’s staff in India has also come under the scanner in a separate probe in the US for deficiencies in their role as “offshore reviewers" of the global banking giant’s compliance with safety mechanism against money laundering and terrorist financing.

Both HSBC and Standard Chartered spokespersons could not be reached for comment.

The Income Tax department has, meanwhile, decided to include money laundering in its soon to be filed chargesheet against individuals named in the classified HSBC list for stashing illegal funds.

Joel Rebello and Remya Nair of Mint contributed to the story.

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Published: 13 Aug 2012, 12:01 AM IST
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