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.
The outsourcing of key oversight jobs to India by these banks has come under the US scanner in separate probes related to issues like money laundering and terror financing. Both the matters have come to the fore in less than a month’s time, raising serious concerns over the impact on the image of Indian outsourcing industry and possible implication on India’s fight against money laundering and terror funding.
Sources said the Indian financial sector authorities have started gathering all possible details about the two banks and any possible lapse in their compliance to regulations against money laundering and terror financing. As part of this exercise, RBI would soon approach FSA, with which, it had recently signed an MoU for exchange of information and co-operation in surveillance operations.
New York’s Department of Financial Services had accused Standard Chartered of hiding about 60,000 secret transactions with Iran, involving a whopping $250 billion, and exposing the US financial system to terrorists, weapon dealers etc. HSBC’s India staff have come under scanner in a US probe for deficiencies in their role as “offshore reviewers” of the bank’s compliance to safety mechanism against money laundering and terrorist financing.