Guidelines in this regard are being issued separately, the RBI Governor said.
Mumbai: The Reserve Bank of India (RBI) said on Wednesday that the meeting-lenders will be allowed to pour or withdraw funds at their overseas branches without seeking prior approval from the bank. this, subject to meeting certain regulatory capital requirements.
Currently, banks incorporated in India can pour capital into overseas branches and subsidiaries, retain profits in these centers and repatriate/remit profits with prior approval of RBI.
“With a view to providing operational flexibility to banks, it has been decided that banks do not need to seek pre-approval from the RBI if they meet regulatory capital requirements,” said RBI Governor Shaktikanta Das said while announcing the bimonthly monetary policy.
Guidance on the matter is being issued separately, he added.
Additional regulatory guidelines for the classification and valuation of scheduled commercial banks’ portfolios are largely based on a framework introduced in October 2000 that is based on standards and good practice. most current globally.
Given the subsequent significant developments in global standards for the classification, measurement and valuation of investments, the link with the capital adequacy framework as well as advances in financial markets in the future, he said. countries, it is necessary to review and update these standards. .
In this regard, a discussion document covering all relevant aspects will soon be posted on the RBI website for comments, he noted.
Regarding LIBOR’s impending shutdown, Das said any widely accepted interbank rate or Alternative Reference Rate (ARR) applicable to the borrowing currency could be used as a benchmark. , after decommissioning.
Currently, the benchmark interest rate for Foreign Currency External Commercial Loan (FCY) (ECB) / Commercial Credit (TC) is set as the six-month LIBOR or any six-month interbank rate. other applies to the borrowed currency.
To account for the difference in credit risk and term premiums between LIBOR and ARR, for new foreign currency ECBs and TCs, it is proposed to revise the full cost cap from 450 to 500 basis points. and from 250 to 300 basis points. corresponding point (bps) on the ARR.
To allow for the transition of existing LIBOR-linked ECBs and CTVs, it is proposed to modify the full cost cap from 450 to 550 bps and from 250 to 350 bps to the ARR, respectively.
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