Branches of Indian banks in overseas can deal in financial products not permitted in domestic market
RBI also said the activities of branches/subsidiaries in foreign jurisdictions and IFSCs would be subject to the laws in India unless specifically exempted by law.
The Reserve Bank on Thursday allowed with certain riders foreign branches and subsidiaries of Indian banks to deal in financial products that are not specifically permitted in the domestic market.
On a review, an RBI circular said it was felt that a framework needs to be in place to allow them to undertake activities which are not specifically permitted in the Indian domestic market and also to specify the applicability of these instructions to International Financial Services Centers (IFSCs) in India, including Gujarat International Finance Tec-City (GIFT City).
"The foreign branches/foreign subsidiaries of Indian banks/AIFIs can deal in financial products, including structured financial products, which are not available or are not permitted by the Reserve Bank in the domestic market without prior approval of Reserve Bank...," it said.
Similar permission has been granted to branches and subsidiaries of Indian banks/All India Financial Institutions (AIFIs) operating in IFSCs including those operating out of GIFT City.
Specifying conditions for dealing in financial products, the RBI said the banks and AIFIs will have to ensure that such branches and subsidiaries do not deal in products linked to Indian Rupee unless specifically permitted by Reserve Bank.
They cannot also accept structured deposits from any Indian resident.
Further, the financial products dealt with by the foreign branches and subsidiaries as well as IFSCs will attract prudential norms such as capital adequacy, exposure norms, periodical valuation, and all other applicable norms, the RBI said.
"Parent bank shall adhere to more stringent among the host and home regulations in respect of prudential norms," it added.
RBI also said the activities of branches/subsidiaries in foreign jurisdictions and IFSCs would be subject to the laws in India unless specifically exempted by law.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Power of Compounding: How many years will it take to reach Rs 3 crore corpus if your monthly SIP is Rs 4,000, Rs 5,000, or Rs 6,000
Power of Compounding: Salary Rs 25,000 per month; is it possible to create over Rs 2.60 crore corpus; understand it through calculations
Reduce Home Loan EMI vs Reduce Tenure: Rs 75 lakh, 25-year loan; which option can save Rs 25 lakh and 64 months and how? Know here
Top 7 Large and Mid Cap Mutual Funds with Best SIP Returns in 5 Years: No. 1 fund has turned Rs 15,000 monthly SIP investment into Rs 20,54,384; know about others
New Year Pick by Anil Singhvi: This smallcap stock can offer up to 75% return in long term - Check targets
PSU Oil Stocks: Here's what brokerage suggests on these 2 largecap, 1 midcap scrips - Buy, Sell or Hold?
08:55 PM IST