Skip to content
Search

Latest Stories

India allows banks to infuse capital in overseas branches without prior approval

India allows banks to infuse capital in overseas branches without prior approval

INDIAN banks will be allowed to infuse capital in their overseas branches and repatriate profits without seeking prior approval from the central bank.

Currently, banks incorporated in India can infuse capital in their overseas branches and subsidiaries, retain profits in these centres and repatriate or transfer the profits with prior approval of the Reserve Bank of India (RBI).


"With a view to providing operational flexibility to banks, it has been decided that banks need not seek prior approval of the RBI if they meet the regulatory capital requirements," RBI governor Shaktikanta Das said while announcing the bi-monthly monetary policy.

He added that instructions on the matter are being issued separately.

Extant regulatory instructions on classification and valuation of investment portfolios by scheduled commercial banks are largely based on a framework introduced in October 2000, drawing upon the then prevailing global standards and best practices.

Given the subsequent developments in the global standards on classification, measurement and valuation of investments, the linkages with the capital adequacy framework as well as progress in the domestic financial markets, there is a need to review and update these norms, he said.

As a step in this direction, a discussion paper covering all relevant aspects will be placed shortly on the RBI website for comments, he noted.

Das said any widely accepted interbank rate or alternative reference rate (ARR) applicable to the currency of borrowing may be used as a benchmark after imminent discontinuance of LIBOR.

Currently, the benchmark rate for foreign currency external commercial borrowings and trade credit is specified as six-month LIBOR rate or any other six-month interbank interest rate applicable to the currency of borrowing.

Benchmark interest rate unchanged

The RBI kept the benchmark interest rate unchanged at four per cent and decided to continue with its accommodative stance in the backdrop of concerns over the emergence of the new coronavirus variant Omicron.

This is the ninth time in a row that the monetary policy committee (MPC), headed by Das, has maintained the status quo. The RBI had last revised its policy repo rate or the short-term lending rate on May 22, 2020.

Das said the MPC has unanimously decided to keep the benchmark repurchase (repo) rate at four per cent.

Consequently, the reverse repo rate, at which banks deposit their money with the RBI, remains at 3.35 per cent.

The central bank retained its growth projection at 9.5 per cent for the current fiscal despite concerns over Omicron.

Das also said the headline inflation would peak in the fourth quarter of the current fiscal. The inflation projection has been retained at 5.3 per cent.

Retail inflation rose to 4.48 per cent in October from 4.35 per cent in September, mainly due to higher fuel and edible oil prices.

(PTI)

More For You

single-use vapes-iStock

Analysis by Material Focus estimates that 8.2 million vapes are discarded or littered each week in the UK—equivalent to 13 every second. (Representational image: iStock)

iStock

Shops told to clear single-use vapes before ban starts on June 1

SHOPS across the UK have until 1 June 2025 to sell off remaining stocks of single-use vapes before a nationwide ban comes into force.

The legislation, confirmed last year, follows a government consultation that showed strong support for restricting their sale and supply.

Keep ReadingShow less
Primark-London-Getty

During his 15-year tenure, Marchant expanded Primark’s store network to more than 450 locations across 17 countries in Europe and the United States. (Photo: Reuters)

Primark chief Paul Marchant steps down after misconduct probe

PAUL MARCHANT, the head of fashion retailer Primark, has resigned with immediate effect after admitting to an "error of judgment" in his behaviour towards a woman in a social setting.

Associated British Foods (AB Foods), Primark's parent company, announced his resignation on Monday.

Keep ReadingShow less
Jaguar’s bold gamble: Can it woo young, wealthy drivers with a £123k EV?

Jaguar’s bold gamble: Can it woo young, wealthy drivers with a £123k EV?

JAGUAR’S ambition to seduce younger, richer drivers was on full display in Paris with a presentation of its newest prototype, the Type 00, which promises all-electric luxury... at a steep price.

The low-slung, muscular-looking concept car presented to European reporters last Friday (21) prefigures a production model expected mid-2026 at a base cost of €150,000 (£123,472.8).

Keep ReadingShow less
Starmer-Trump-Getty

Trump has suggested the possibility of a 'great' trade deal that could help the UK mitigate the impact of tariffs he has pledged to introduce. (Photo: Getty Images)

Starmer, Trump talk trade deal progress in 'productive' discussion

KEIR STARMER and Donald Trump spoke on Sunday about ongoing UK-US trade negotiations, with Downing Street describing the talks as "productive."

Since leaving the European Union, the UK has been working to secure a trade agreement with the United States. Successive British governments have pursued a deal, but it has remained elusive.

Keep ReadingShow less
modi-trump-getty
Trump shakes hands with Modi during a joint press conference at Hyderabad House in New Delhi on February 25, 2020. (Photo: Getty Images)

India-US trade talks end with no sign of tariff relief

INDIA and the United States have agreed to move forward on finalising a part of their bilateral trade deal this year, but there was no indication of any tariff relief for India.

Trade discussions took place in New Delhi ahead of the implementation of US president Donald Trump's new trade tariff regime, which includes import levies on India, set to take effect from 2 April.

Keep ReadingShow less