General permission for infusion of capital in overseas branches and subsidiaries and retention/ repatriation/ transfer of profits in these centres by banks incorporated in India

Last updated: 09 December 2021

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The Reserve Bank of India (RBI) has granted general permission for Indian banks to infuse capital into their overseas branches and subsidiaries. Banks that meet regulatory capital requirements no longer need prior RBI approval for capital infusion, retention, repatriation, or transfer of profits. Instead, they must obtain approval from their respective boards and report such actions to the RBI within 30 days. This change aims to provide greater operational flexibility.

RBI/2021-22/136 DOR.CAP.REC.No.72/21.06.201/2021-22 December 08, 2021 Dear Sir/ Madam, General permission for infusion of capital in overseas branches and subsidiaries and retention/ repatriation/ transfer of profits in these centres by banks incorporated in India Please refer to para 1 of the Statement on Developmental and Regulatory Policies dated December 8, 2021on the above subject. 2. As per extant practice, banks incorporated in India seek prior RBI approval for in

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FAQ :

Indian banks that meet regulatory capital requirements can now infuse capital into their overseas branches and subsidiaries, and manage profits (retention, repatriation, transfer) without needing prior approval from the RBI. Board approval is now sufficient for these actions.

No, only banks that do not meet the minimum regulatory capital requirements will still need to seek prior approval from the RBI. Banks meeting these requirements have been granted general permission.

The general permission covers the infusion of capital in overseas branches and subsidiaries, as well as the retention, repatriation, and transfer of profits in these overseas centres.

Banks must ensure they meet regulatory capital requirements, obtain board approval for overseas capital infusion and profit management, and comply with all applicable home and host country laws and regulations. They also need to report these actions to the RBI within 30 days.

This circular is applicable to all Scheduled Commercial Banks other than foreign banks, Small Finance Banks, Payment Banks, and Regional Rural Banks.

Notification No : RBI/2021-22/136 DOR.CAP.REC.No.72/21.06.201/2021-22
Source : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12205&Mode=0

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