India Issues Notices to Standard Chartered, One Other Bank

   By Rajesh Roy and Nupur Acharya 
 

NEW DELHI--An Indian investigating agency Thursday issued notices seeking responses from the local unit of Standard Chartered Bank and a local bank for alleged violation of foreign exchange rules in a related case.

The Enforcement Directorate, which probes money laundering and foreign exchange cases, found that Tamilnad Mercantile Bank Ltd. (TMB.YY) violated rules by transferring shares to overseas entities without the permission of the central bank.

Standard Chartered opened an escrow account, allowing the transfer of these shares, the agency said in a statement. It also took custody of immovable properties in India and accepted shares of Tamilnad Mercantile Bank, both as collateral against a loan its Mauritius branch gave to these foreign investors, the agency added.

The amount in violation by Standard Chartered Bank stood at 3.34 billion rupees ($53 million) while that by Tamilnad Mercantile was 2.74 billion rupees ($43 million), the agency said.

Tamilnad Mercantile Bank Company Secretary Deepak C.S. said the bank can't comment as it hasn't yet received the notice from the agency. Standard Chartered Bank declined to comment.

Write to Rajesh Roy on [e-mail] Nupur Acharya at [e-mail]

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