RBI to announce facility for NRIs to exchange old notes
The Reserve Bank of India (RBI) on Saturday said that it will introduce a facility for exchange of old specified…
Reserve Bank on Thursday allowed
IFSC banking units (IBUs) to undertake derivative transactions, including those
involving structured products.
“With the prior approval
of their board of directors, the IBUs may undertake derivative transactions
including structured products that the banks operating in India have been
allowed to undertake as per the extant RBI directions,” the central bank
said in a notification.
However, it said IBUs shall
obtain RBI s prior approval for offering other derivatives or structured
products.
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“Before seeking RBI s
approval, banks shall ensure that the IBUs have necessary expertise to price,
value and compute the capital charge and manage the risks associated with the
products/transactions intended to be offered and should also obtain their board
s approval for undertaking such transactions,” he said.
An IFSC banking unit (IBU)
allows an Indian bank to deliver a complete range of products to its clients
with foreign currency funding requirements. IBUs can offer products such as
external commercial borrowings to their customers.
IBUs are allowed to open
foreign currency escrow account of Indian resident entities to temporally hold
subscriptions to GDR/ADR issues until issuance of the receipts, it said.
After GDRs/ADRs are issued,
the funds should immediately be transferred to the client s account outside the
IBU and cannot be retained by the bank in any form including in long term
deposits, it added.
Besides, RBI allowed IBUs to
act as underwriter of rupee denominated overseas bonds issued by Indian
entities in overseas markets.
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