General permission for infusion of capital in overseas branches and subsidiaries and retention/ repatriation/ transfer of profits

(A).    With effect from 8th December 2021, with an objective of having a greater operational flexibility, RBI has decided that no prior approval required to be obtained by Scheduled Commercial Banks (incorporated in India) for:

(a).   infusion of capital in their overseas branches and subsidiaries
(b).   retention of profits in, and transfer or repatriation of profits from these overseas centres.

Provided banks meet the regulatory capital requirements (including capital buffers).  

(B).    While general permission is granted, RBI stated that:

(i) banks shall seek approval of their board;

(ii) analyse the business plans, home and host country regulatory requirements and performance parameters of their overseas centres.

(iii) ensure compliance with all applicable home and host country laws and regulations.

(C).    Prior approval necessary if banks do not meet the minimum regulatory capital requirements

(D).   This circular is NOT applicable to foreign banks, Small Finance Banks, Payment Banks and Regional Rural Banks

(E). Reporting of instances withing 30 days of action

#RBI #banks #business

Leave a Reply