Governor in additional measures announced after monetary policy review Shaktikanta Das He said banks would no longer require regulatory approval to infuse or repatriate capital from their foreign subsidiaries.
“At present, banks incorporated in India can infuse capital in their overseas branches and subsidiaries; retain profits in these centres; and repatriate/transfer profits with the prior approval of the RBI. Banks are required to provide operational flexibility. With a view, this has been done after Das announced his policy statement that banks are not required to seek prior approval of the RBI to meet regulatory capital requirements.
To be sure, banks are reducing their exposure to their overseas branches and subsidiaries as they focus on their domestic operations after the 2008 financial crisis.
The central bank will also hold a discussion paper to review and update the prudential norms on classification and valuation of investment portfolios by scheduled commercial banks. These criteria were last reviewed in October 2000. “Given the significant developments in the domestic financial markets since then and global standards/best practices in this area, a need has been felt to review and update these norms after a consultation process,” Das said.