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 rajesh.roy@wsj.com Nupur Acharya at
nupur.acharya@wsj.com
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