RBI penalises JP Morgan Chase

The Reserve Bank on Friday imposed a penalty of Rs 5 lakh on US banking major JP Morgan Chase for violation of various norms including risk-management guidelines.

"The Reserve Bank of India has imposed a penalty of Rs 5 lakh on JP Morgan Chase, N.A., Mumbai (the bank)..." the central bank said in a statement.

The penalty on the bank is for "contraventions of various directions and instructions issued by the Reserve Bank in respect of Risk Management and Inter Bank Dealings and Compliance Functions".

These contraventions took place in 2011-2012, it added. "We have noted RBI observations and taken remedial measures," JP Morgan Chase India spokesperson said.

Earlier, RBI had issued show-cause notice to JP Morgan Chase and in response to it the bank had submitted its written reply.

"On a careful examination of the bank's written reply and the documents available on record, the Reserve Bank found that the violations were conclusively established and a penalty of Rs 5 lakh was thus imposed," RBI said.

RBI has imposed the penalty under the Banking Regulation Act, 1949.