Mumbai: A Reserve Bank of India (RBI) investigation that found lapses in the way Standard Chartered Bank sold complex derivative products to clients in India has triggered fixing of accountability at the lender, people familiar with the matter said.

At least three people from the bank’s forex derivatives desk have exited, according to two people aware of the terminations.

The regulator launched a probe a few months ago after several small enterprises alleged the bank did not follow due process while selling leveraged forex derivative contracts. Last month, the investigation reportedly found merit in some of these claims, prompting the overseas lender to initiate corrective steps.
When asked about a few employees leaving following the RBI investigation, a Standard Chartered spokesperson said the “bank categorically states that the allegations are completely baseless, frivolous and malicious in nature.”

Possible Inadequate Disclosures
Separately, the bonuses of a few senior officials, including key leadership in the financial markets division, have been withheld, people familiar with the matter said, citing the ongoing nature of the internal review and regulatory concerns

A person with knowledge of the matter said the exits follow the regulatory probe. “The development follows RBI’s inspection which shows that the bank sold forex derivative products to clients without their proper knowledge,” one of the people said. Another person in the know, however, said that while a couple of people have resigned from the forex desk, it could be due to reorganization.