RBI permits foreign branches of banks to sell derivatives not allowed in India
Foreign branches and overseas subsidiaries of Indian banks have been allowed by the RBI to sell structured financial and derivative products in established financial centres even if these products are not permitted in India. However, these products like Exchange Traded Funds (ETFs) and Bond Derivatives are not allowed in the domestic market.
As per earlier norms, banks were not allowed to offer structured financial products through their branches or subsidiaries outside India that are not specifically permitted in the domestic market.
This was the outcome of the review of an earlier December 2008 circular that made it mandatory for banks to get prior approval of the RBI by rendering details of the products, including their regulatory treatment prescribed by the host-country regulators.
Month: Current Affairs - May, 2014