Reserve Bank Foreign branches and subsidiaries of Indian banks were on Thursday allowed to deal with financial products that are not specifically permitted in the domestic market, subject to certain conditions. On a review, a reserve Bank of India The circular stated that it was felt that there is a need for a framework to allow them to undertake activities not specifically permitted in the Indian domestic market and to specify the applicability of these directions. International Financial Services Center ,IFSCs) in India, including Gujarat International Finance Tech-City (Gift City).

“Overseas branches/foreign subsidiaries of Indian banks/AIFIs may deal in financial products, including structured financial products, which are not available in the domestic market or permitted by the Reserve Bank without prior approval of the Reserve Bank…” Said this.

Similar permission has been granted to branches and subsidiaries of Indian banks/All India Financial Institutions (AIFIs) operating in IFSCs, including those operating out of GIFT City.

Specifying the conditions for dealing in financial products, the RBI said that banks and AIFIs shall ensure that such branches and subsidiaries do not deal in Indian rupee denominated products unless specifically permitted by the Reserve Bank. is not given. They also cannot accept structured deposits from an Indian resident.

Further, financial products dealt by overseas branches and subsidiaries as well as IFSCs would attract prudential norms such as capital adequacy, risk norms, periodic appraisals and all other applicable norms.

“The parent bank shall follow more stringent norms between host and domestic regulations with regard to prudential norms,” ​​it said.

RBI also said that the activities of branches/subsidiaries in foreign jurisdictions and IFSCs would be subject to laws in India unless specifically exempted by law.