Money & Banking
RBI says would take action against HSBC based on findings in AFI report

The central bank said based on observations reported in its Annual Financial Inspection of HSBC for 2012, it would take further action against the lender, which is under the scanner for alleged violations of money-laundering and KYC norms

The Reserve Bank of India (RBI) has said that it would take further action against HSBC based on the observations made during its Annual Financial Inspection (AFI) for 2012.


Replying to a Right to Information (RTI) application filed by Indian Police Service (IPS) officer Amitabh Thakur and social activist Dr Nutan Thakur, the central bank said the matter was examined during its AFI of HSBC.


The RBI, however, has refused to share the findings of the AFI report. It said, “The matter was examined during AFI of the bank, however, the findings of the same are received by us in a fiduciary capacity and the disclosure of the same may prejudicially affect the economic interest of the bank (HSBC). Hence the same is exempted from the disclosure in terms of Section 8(1)(d) and (e) of the RTI Act, 2005.”


Last year, the RBI started scrutinising anti-money laundering (AML) and know your customer (KYC) systems of Standard Chartered and HSBC. Besides, the Financial Intelligence Unit-India (FIU-IND) had also initiated a fact-finding exercise related to HSBC’s operations in India and its compliance to AML and counter financing of terrorism (CFT) regime.


The RBI was also seeking details from British financial sector regulator Financial Services Authority (FSA) about the two UK-based global banking giants, which have a significant presence in India and whose outsourcing of key oversight jobs to India had come under the US scanner in separate probes related to issues like money laundering and terror financing.


Last year, the Income-Tax (I-T) department probing the secret list of account holders in the Geneva branch of HSBC Bank, had approached Swiss revenue authorities for banking data of certain individuals after investigations showed some of them reportedly had other accounts under fictitious names.


India had obtained data of over 700 HSBC accounts from the French government channels last year.


Earlier, in July 2012, the US Senate's Permanent Sub-committee on Investigations said HSBC was found to be doing business with Al Rajhi Bank, whose key founder was an early financial benefactor of al Qaeda, and also have provided US dollars and services to some banks in Saudi Arabia and Bangladesh despite their links to terrorist financing.


The bank had also been accused of indulging in various questionable transactions with entities from countries like Mexico, Iran, North Korea, Saudi Arabia, Bangladesh, Syria, Cuba, Sudan, Burma, Cayman Islands, Japan and Russia.


After the report, HSBC paid a fine of $28 million to Mexican authorities for non-compliance with money laundering controls. The money-laundering issue stemmed from HSBC’s acquisition of Mexican company Grupo Financiero Bital in 2002.


A US Senate investigative committee reported that in 2007 and 2008 HSBC Mexico sent about $7 billion in cash to the United States. The committee report says that amount of cash indicated illegal drug proceeds.


HSBC Mexico acknowledged that it failed to report 39 suspicious transactions and had been late in reporting 1,729 others.



Michael Mason-Mahon

4 years ago

The RBI may like to look at the way HSBC India and the Chairman Mr Flint of HSBC Holdings Plc are treating customers in India.

They may also like to investigate the personal details supplied to JM Finacial conerning the sale by HSBC India to JM Financial.

By the behaviour of The Hongkong and Shanghai Banking Corporation Limited in India is the HSBC Group breaking the Defered Procution Agreement with the DOJ IN THE usa?

How many people have HSBC India falsely registered with CIBIL?

Nifty, Sensex delicately poised: Weekly Market Report

If Nifty goes below 5840, it may break the recent low of 5,664

The market settled lower as economic indicators released during the week pointed to a slowdown in growth and on nervousness ahead of the Reserve Bank of India’s (RBI) policy review, due on 19th March. Unsupportive global cues also weighed on the sentiments. Analysts expect the central bank to make marginal rate cut to soothe investors after the Union Budget last month disappointed corporates and investors.
The Sensex settled 256 points (1.30%) down at 19,428 and the Nifty ended the week at 5,873, a fall of 73 points (1.23%). If Nifty goes below 5840, it may break the recent low of 5,664.
The market settled lower on Monday on negative cues from Europe. The benchmarks ended in the red on Tuesday as retail inflation for February was in double digits at 10.91%, displaying an upward trend for the fourth month in a row. Disappointing global cues led the indices down on Wednesday.
The market settled in the positive on Thursday, snapping its three-day losing streak, on support from rate-sensitive sectors. A sell-off in realty, banking and oil & gas stocks after the government and the RBI said they would probe the money laundering charges in the top three private banks, dragged the market lower on Friday.
BSE Fast Moving Consumer Goods index (up 1%) was the lone gainer in the sectoral space. BSE Consumer Durables (down 4%) and BSE Bankex (down 3%) were the top losers.
Hindustan Unilever (up 5%), Tata Power, Mahindra & Mahindra, State Bank of India (up 3% each) and Sun Pharmaceutical Industries (up 2%) were the top gainers on the Sensex. The losers were led by Bajaj Auto (down 8%), ICICI Bank (down 6%), Hindalco Industries, GAIL India (down 5% each) and BHEL (down 4%).
The chief gainers on the Nifty were Ranbaxy Laboratories (up 9%), Siemens (up 8%), Asian Paints (up 7%), HUL (up 5%) and Tata Power (up 3%). The key losers on the index this week were Bajaj Auto (down 8%), ICICI Bank, Hindalco Ind (down 6% each), GAIL India and Axis Bank (down 5% each). 
Retail inflation moved up to 10.91% in February—remaining in the double-digit terrain for the third month in a row—on account of higher prices of vegetables, edible oil, cereals and protein-based items.
Industrial production, as measured by the Index of Industrial Production (IIP), rose by 2.4% in January from 1% in the same month last year, mainly due to an uptick in manufacturing output and enhanced power generation.
The Wholesale Price Index (WPI) based inflation for February stood at 6.84%, higher than 6.62% recorded in the previous month.
India's exports rose by 4.25% to $26.26 billion in February, growing for the second month in a row. Imports went up by 2.6% to $41.1 billion in the month under review, leaving a trade deficit of $14.92 billion.
In corporate news, Sistema Shyam TeleServices (SSTL), which provides telecom services under the MTS brand, won spectrum in the 800 MHz (CDMA) band in eight circles where it was the lone bidder in the auction held on 11th March. The circles won by MTS India include Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) & West Bengal.
Three top private banks—ICICI, HDFC and Axis—have been accused of running a nationwide money laundering racket by an online investigative news magazine, Cobrapost, based on a sting operation that they said spanned some five months.
In international news, Eurozone ministers approved a deal on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion) to stave off bankruptcy. Cyprus is the fifth country after Greece, Ireland, Portugal and Spain to turn to the Eurozone for financial help in the wake of the sovereign debt crisis that started in 2010.
Meanwhile, the University of Michigan confidence index for early March fell to 71.8 from 77.6 in February, pointing to a slowdown household spending, data released on Friday showed. However, analysts brushed aside the lower figure saying that was a temporary reaction to recent news reports.




4 years ago

Done again have shattered investors confidence these Banks

Book Review: India's Biggest Cover Up

It has been clear that Netaji Subhas Chandra Bose did not die in the plane crash in 1945. But...

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