Standard Chartered Faces Penalty Worth $13.6M By India


The UK’s one of the top multinational banks, Standard Chartered, faces a fine worth 1 billion INR ($13.6 million) by India’s anti-money laundering administration for violating the nation’s forex exchange rules when it took over a local bank.

The penalty came after eight years of the probe, when in 2007, the company took over South India’s Tamilnad Mercantile Bank Ltd, stamping one of the biggest fines by South Asian nation executed on a foreign lender.

India’s FOREX management act, which controls the overseas activities and financial transactions, has also fined the Tamilnad Mercantile Bank a penalty worth 170 million rupees ($2.31M) along with UK’s financial service provider.

According to the order, the case began when Tamilnad Bank transferred around 46,862 company stocks to foreign investors, including Swiss Re Investors, GHI Ltd, and FI Investments and Cuna Group, without taking the permission from Reserve Bank of India. The case is 13 years old, and some of these transferred stocks were then further sent to Sub-Continental Equities Ltd, which is an affiliate of Standard Chartered, in April 2008.

The processing of shares was done through these investors, with them being escrow accounts, for Standard Chartered, India’s biggest overseas bank by branches. The UK’s bank acted as an agent and lender with one of the overseas investors, according to the reports.


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