Reserve Bank of India tells ICICI Bank, HDFC Bank, Yes Bank, Citi, Deutsche, Standard Chartered, HSBC and ABN Amro to stop selling exotic forex products
Nina Shankaran
Feb. 7, 2008

Certain banks and financial institutions sold a lot of exotic foreign exchange products that eventually caused a massive loss for Indian companies in the export sector.

The central bank has told banks that they should sell only vanilla rupee-dollar derivative products from now on and that too only for hedging corporate foreign currency exposures, not for trading.

The banking regulator has also set up an inspection team to scrutinise the transactions of select banks. The team has inspected one of the foreign banks active in the forex derivatives business and will be checking the books of about 10 private sector and foreign banks.

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