Rajeev Chandrasekhar's official website - Member of Parliament

 

 

GOVERNMENT OF INDIA

Ministry of Finance

DEPARTMENT OF FINANCIAL SERVICES

RAJYA SABHA

STARRED QUESTION NO *166

TO BE ANSWERED ON 11TH MARCH, 2008 

Derivatives Trading By Indian Banks

*166.

SHRI RAJEEV CHANDRASEKHAR

 

 

Will the Minister of FINANCE be pleased to state:-

(a) the quantum of derivatives trading and exposure on Indian stock market by Indian banks with their own capital during the last three years ending 3 1st December, 2007, year-wise and bank-wise, and

(b) what systematic safeguards are in place to prevent the recurrence of any large scale losses arising from derivatives trading like the one recently reported in France by Societe Generale?

 

ANSWER

The Minister of Finance

(Shri P. Chidambaram)

(a) & (b) : A Statement is laid on the Table of the House.

Annex 1

(In Crores)

Outstanding notional Principal Amount of Derivatives as at end Dec05,06 and 07
SL.NOBANK NAMEDec-05Dec-06Dec-07
1ALLAHBAD BANK11185.8321463.737474.64
2ANDHRA BANK15806.5517440.1514921.74
3BANK OF BARODA21713.4532587.4639144.89
4BANK OF INDIA38169.0650431.6797620.75
5BANK OF MAHARASHTRA5565.249331.4710529.87
6CANARA BANK81317.3836864.8859195.3
7CENTRAL BANK OF INDIA9324.3110030.8614320.1
8CORPORATION BANK12312.771589619314.03
9DENA BANK4102.346562.911213.37
10IDBI ltd59441.6889564.5881458.83
11INDIAN BANK5031.294061.55542.96
12INDIAN OVERSEAS BANK6867.076240.5910955.39
13ORIENTAL BANK OF COMMERCE3106.855558.27131.59
14PUNJAB & SIND BANK1842.741137.741437.72
15PUNJAB NATIONAL BANK34466.1557267.8666310.92
16SYNDICATE BANK29500.2325010.983201.34
17UCO BANK10212.0910943.7721487.16
18UNION BANK OF INDIA29787.3236277.138851.27
19UNITED BANK OF INDIA1177.52447.013470.32
20VIJAYA BANK5580.175942.915576.46
NATIONALISED BANK386510.02445061.33549158.65
21STATE BANK OF BIKANER & JAIPUR2472.694141.212097.17
22STATE BANK OF HYDERABAD11874.829294.9812774.65
23STATE BANK OF INDIA149858.28276972.76468804.07
24STATE BANK OF INDORE11979.216097.3519937.3
25STATE BANK OF MYSORE3915.555229.049763.91
26STATE BANK OF PATIALA29544308.0514762.58
27STATE BANK OF SAURASHTRA2831.082050.264311.99
28STATE BANK OF TRAVANCORE7292.0210663.568191.44
SBI & ASSOCIATES193177.64328757.2550643.11
TOTAL PUBLIC SECTOR BANKS579687.66773818.531099801.76
29BANK OF RAJASTHAN Ltd415.2464.56497.67
30BHARAT OVERSEAS BANK Ltd955.71626.26
31CATHOLIC SYRIAN BANK Ltd171.9351.73571.38
32CITY UNION BANK Ltd455.881172.732656.26
33DHANALAKSHMI BANK Ltd160.74223.43180.75
34FEDERAL BANK Ltd12344.5112236.6510009.15
35GANESH BANK OK KURUNDWAD Ltd000
36ING Vyasa BANK Ltd25169.5323555.0745959.02
37JAMMU & KASHMIR BANK Ltd3659.44836.225332.1
38KARNATAKA BANK Ltd1196.292103.674279.81
39KARUR Vyasa BANK Ltd1570.212957.323695.67
40LAKSHMI VILAS BANK Ltd449.86390.84583.11
41LORD KRISHNA BANK Ltd49.0628.070
42NAINITAL BANK Ltd000
43RATNAKAR BANK Ltd000
44SBI COMMERCIAL & INTERNATIONAL BANK Ltd76.5470.2326.44
45SANGLI BANK Ltd26.825.280
46SOUTH INDIAN BANK Ltd707.4630.15457.43
47TAMILNAD MERCANTILE BANK Ltd354.37292.61996.38
48UNITED WESTERN BANK Ltd138.52
OLD PRIVATE BANKS47901.9845944.7975545.17
49AXIS BANK Ltd74037.76108916.5215179.66
50CENTURION BANK OF PUNJAB Ltd2560.815179.2616016.57
51DEVELOPMENT CREDIT BANK Ltd3260.551894.714159.83
52HDFC BANK Ltd183050.76257804.15504406.88
53ICICI BANK Ltd289105.68394709.41767804.73
54INDUSLND BANK LTD12944.2217934.3423805.31
55KOTAK MAHINDRA BANK Ltd36541.9472281.57122311.59
56YES BANK Ltd15967.7638193.3565681.27
NEW PRIVATE BANKS617469.48896913.291719365.84
57ABN AMRO BANK N.V187672.86393809.11787661.54
58ABU DHABI COMMERCIAL BANK Ltd429.59380.17235.07
59AMERICAN EXPRESS BANK Ltd41133.0160610.8863299.54
60ANTWERP DIAMOND BANK NV221.38120.59330.73
61ARAB BANGLADESH BANK000
62BNP PARIBAS159325.18359871.64571163.07
63BANK INTERNATIONAL INDONESIA22.589.0519.74
64BANK OF AMERICA N.T & S.A104654.93171918.96513764.71
65BANK OF BAHRAIN & KUWAIT BSC135.5188.22153.97
66BANK OF CEYLON343.6152.1122.77
67BANK OF NOVA SCOTIA7180.229997.8711982.64
68BARCLAYS BANK PLC188882.46423738.48896940.65
69CALYON BANK163116.22264839.13568950.89
70CHINA TRUST COMMERCIAL BANK50.1530.555.15
71CITI  BANK N.A265795.93424927.621636639.79
72DEUTSCHE BANK (ASIA)232796.99455551.971313175.06
73DEVELOPMENT BANK OF SINGAPORE Ltd29146.2681350.98223256.64
74HONGKONG &SHANGHAI BANKING CORPORATION Ltd224196.88421038.691096328.97
75JP MORGAN CHASE BANK,NATIONAL ASSOCIATION113350.63233086.94754749.2
76KRUNG THAI BANK PCL2.092.090.060
77MASHREQ BANK PSC82.2321.9113.44
78MIZUHO CORPORATE BANK Ltd304.12299.642743.77
79OMAN INTERNATIONAL BANK S.A.O.G226.76198.74193.52
80SHINHAN BANK94.2648.9338.38
81SOCIETE GENERALE14493.4435255.18101674.51
82SONALI BANK2.612.052.36
83STANDARD CHARTERED BANK286215.05562376.331343546.64
84STATE BANK OF MAURITIUS Ltd185.52479.52200.65
85THE BANK OF TOKYO-MITSUBISHI UFJ.Ltd1835.83559.294785.06
86U.F.J BANK Ltd286.34
FOREIGN BANK2022182.583905764.619891878.46
ALL BANKS3267241.75622441.2212786591.2
Source : Reserve Bank of India   
 * Indicates banks closed / merged

 

STATEMENT FOR RAJYA SABHA STARRED QUESTION NO. 166 FOR 11th MARCH, 2008 REGARDING DERIVATIVES TRADING BY INDIAN BANKS TABLED BY SHRI RAJEEV CHANDRASEKHAR

(a) As per the extant guidelines of Reserve Bank of lndia (RBI), equity derivatives are not in the list of permissible derivative instruments that may be transacted by the banks. Bank-wise statements indicating total outstanding notional principal amount of derivatives and outstanding direct investment by Indian banks in capital market for the last three years as at end December 2005, 2006 and 2007 are at Annex I and Annex 1I respectively.

(b) To provide a framework for undertaking derivatives transactions from a regulatory perspective, RBI has issued comprehensive guidelines on derivatives on 20t~ April, 2007 enunciating the broad principles and major requirements for undertaking derivative transactions, such as the participants, purpose, eligibility criteria to undertake such transactions, permissible derivative instruments / products, etc. The guidelines also set out basic principles of a prudent system to control the risks arising out of derivative transactions as .also on corporate governance aspects. As per these guidelines, the banks have to put in place a Board approved policy framework for derivative transactions, to ensure, inter-alia, that the policy is consistent with the strategic objectives, capital strength and management capabilities of the institution, to hedge or transfer risks effectively, efficiently and expeditiously. RBI has been vested with extensive powers of supervision, regulation and control over the commercial banks through the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934. The main instruments of supervision and monitoring over the banks are through `On-site inspection` and `Off-site monitoring and surveillance`. During On-site inspections, RBI assesses the adherence by the banks to the regulatory guidelines on risk management systems as well as their ability to identify, measure, monitor and manage all types of risks, besides the adequacy and effectiveness of the internal controls and systems in the bank.