Govt puts SBI-Societe Generale JV proposal on hold
August 15th, 2008 | by admin |Rating: 0
Government has put on hold French banking major Societe Generale’s (SocGen) proposed joint venture with State Bank of India for operating custodial and depository services after the RBI raised concerns over its securities fraud amounting to USD 7 billion earlier this year.
“The proposal of SocGen has been put on hold for the time being following RBI objections,” an official source said.
When asked whether it implied that the proposal was rejected, the official said, the company was free to apply fresh by addressing the RBI’s concerns.
Societe Generale, which is considered one of Europe’s biggest bank and a global superstar in the booming derivatives-trading business, disclosed a staggering USD 7.1 billion loss from rogue trading by a single employee in Paris in January this year.
The custodial business encompasses a range of services, including safe-keeping and settlement, reporting, corporate actions, dividends collection and distribution, proxy voting, tax reclaim services and fund administration, besides providing market news and information.
The sources said the fraud has cast its shadow on company’s India plans and the Reserve Bank has also reportedly highlighted that it was found violating trading norms in Zurich.
