RBI, BoE sign pact for cooperation related to Clearing Corporation of India

The Reserve Bank of India (RBI) and the Bank of England on Friday signed an initial pact for cooperation and exchange of information related to Clearing Corporation of India Ltd (CCIL).

The Memorandum of Understanding (MoU) establishes a framework for the Bank of England (BoE) to place reliance on the RBI's regulatory and supervisory activities while safeguarding the UK's financial stability, the RBI said in a statement.

"The MoU also demonstrates the importance of cross-border cooperation to facilitate international clearing activities and the BoE's commitment to deference to other regulators' regimes," it added.

Further, the statement said the MoU confirms the interests of both authorities in enhancing cooperation in line with their respective laws and regulations.

"It will also enable the BoE to assess the application of CCIL for recognition as a third country Central CounterParty (CCP), which is a pre-requisite for UK-based banks to clear transactions through CCIL," the statement said.

The MoU was signed by RBI Deputy Governor T Rabi Sankar and BoE Deputy Governor for Financial Stability Sarah Breeden in London.