Bankers found guilty of "reckless misconduct" in Britain could end up in prison and be stripped of bonuses, under draconian proposals on Wednesday to clean up London's scandal-hit financial sector. The Parliamentary Commission on Banking Standards, established by the government after the Libor rate-rigging scandal last year, made the recommendations in a final report that amounted to a blunt indictment of malpractice. The scandals have besmirched the old and worldwide reputation of the City of London and made some bankers the target of public anger.

Britain needs a "radical" overhaul of its scandal-hit banks, with reckless bankers facing jail and bonuses deferred for up to ten years, a government commission set up after the Libor scandal proposed in a final report on Wednesday. The Parliamentary Commission on Banking Standards, which is mostly composed of lawmakers, concluded that senior bankers must be made personally responsible for malpractice -- with a new criminal offence of reckless misconduct that carries a prison sentence.

By Kirstin Ridley LONDON (Reuters) - Britain's fraud prosecutor on Tuesday charged former UBS <UBSN.VX> and Citigroup <C.N> trader Tom Hayes with eight counts of conspiracy to defraud as it laid the groundwork for what could be the first Libor trial. Hayes, 33, was arrested by London police and the Serious Fraud Office (SFO) last December as part of a global investigation, spanning North America, Europe and Japan, into the manipulation of benchmark interest rates.

India's central bank kept its benchmark interest rates unchanged on Monday after three successive cuts this year, due to inflationary concerns, weak global factors and a depreciating local currency. After meeting in the financial capital Mumbai, the Reserve Bank of India (RBI) said the benchmark repo rate, at which it lends to commercial banks, would be on hold at 7.25 percent, as expected by most economists. sal/rob/tha/dan