The Reserve Bank of India may look into the latest disclosure of an alleged foreign exchange fraud committed by two British executives working for HSBC while servicing Cairn Energy. The alleged scam took place in 2010 when Cairn Energy sold its Indian subsidiary to Vedanta for $3.5 billion. Cairn had hired HSBC to convert dollars from the deal into pounds to pay shareholders.

It has emerged that the two forex traders at HSBC used a technique known as “ramping” or “front-running” that caused the price of pounds to spike. The traders then conducted the forex transaction where Cairn ended up paying a higher price for the sterling.

A senior RBI official told BusinessLine that HSBC was already under investigation by the central bank for alleged violations of the Foreign Exchange Management Act; the new details on the Cairn-Vedanta deal will be examined since it relates to its assets in India. # casansaar (The Hindu)