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At least a dozen large banks from the US and Europe have come under scanner in a global regulatory probe into suspected manipulations in forex markets, with some of them being investigated for possible manoeuvring in over $50-billion a day rupee trade market.
Without specifying the jurisdictions of the probes, some of these banks have admitted to being investigated by regulatory authorities for alleged forex market manipulations.
These include Goldman Sachs, HSBC, UBS, Deutsche Bank, Barclays, RBS, Citigroup and JP Morgan and they have said in their respective regulatory filings that they are cooperating with the relevant authorities in the investigations.
While no Indian banks are believed to be involved in these suspected violations, the manipulations being probed include possible manoeuvring in rupee trades against other global currencies like US dollar, British pound, Swiss franc and Euro in overseas markets, a senior official said.
At the global banks also, those suspected to have indulged into direct manipulations primarily include traders and other staff members at their forex desks, he added.
Some of the banks have been asked by the regulators to provide details of instant messaging and other exchanges between various groups of traders and manipulators.
These groups have been found to be using monikers like 'The Cartel', 'The Dream Team', 'The Bandits' Club' and 'The Club' while communicating for manipulating forex rates.
The manipulation is suspected to have spread across the world, including the developed markets like the US, the UK, Switzerland and other parts of Europe as well as Asian nations like India, Singapore, Hong Kong and Indonesia.
Regulators from across the world, including in India, are cooperating with each other in the probe into the worldwide forex markets, which is estimated to clock trades worth $5.3 trillion a day.
This includes trades worth over $50 billion a day involving Indian rupee, although nearly half of these trades take place outside India and in markets like London, Singapore, Dubai, Switzerland, the UK, Hong Kong and the US.
The manipulations are suspected to have taken place in both spot market rates and the forward markets, although Indian regulators do not have any jurisdiction over rupee trades taking place outside the country.
Within India, RBI regulates spot forex markets, while currency derivatives market is regulated by Sebi.
In most likelihood, the possible manipulation in rupee trades might have taken place outside India, although the role of certain executives at Indian branches of suspected European banks might not be completely ruled out, sources said.
Those looking into the matter mainly include Swiss Financial Market Supervisory Authority FINMA, UK's Financial Conduct Authority (FCA), as also other regulators in Europe and the US, while they are also approaching Indian regulators like Sebi and RBI for the worldwide probe.