You are using an older browser version. Please use a supported version for the best MSN experience.

Indian banks can offer structured derivatives abroad without RBI permission

LiveMint logoLiveMint 12-05-2014 Joel Rebello

Mumbai: The Reserve Bank of India (RBI) on Monday allowed foreign branches and subsidiaries of Indian banks to offer structured financial and derivative products in overseas financial centres like New York, London, Singapore, Hong Kong, Frankfurt and Dubai.

However, such products will continue to be barred in India and banks will have to seek the central bank’s permission to introduce them in the domestic market.

“Banks should ensure that their foreign branches/subsidiaries, dealing with such products in foreign jurisdictions, have adequate knowledge, understanding, and risk management capability for handling such products. At other centers, banks may offer only those products that are specifically permitted in India,” RBI said in a notification on Monday.

Banks had to earlier seek RBI’s permission to offer these products anywhere in the world.

RBI said that the derivative products offered by foreign branches or subsidiaries of Indian banks abroad “should be in compliance with host country regulations, with prior approval from their board and appropriate authority in these foreign jurisdictions.”

“Banks should continue to adhere to more stringent among the host and home regulations in respect of these products. In particular, banks should ensure that the suitability and appropriateness policy is strictly adhered to as mandated by the Reserve Bank and the host regulators,” RBI said.

More From LiveMint

image beaconimage beaconimage beacon