All Scheduled Commercial Banks other than foreign banks, Small Finance Banks, Payment Banks, and Regional Rural Banks incorporated in India who have met regulatory capital requirement (including regulatory buffer) are permitted to infuse capital in overseas branches and subsidiaries and retention/ repatriation/ transfer of profits in these centres by banks incorporated in India. Banks that have not met the regulatory capital requirement however need to seek approval from RBI.
Hitherto for infusion of capital in their overseas branches or retention of profits in and transfer of repatriation of profit from these overseas centre required to take prior approval of RBI. However, these banks are instead required to take approval from their Boards for the same.
While considering the infusion of capital or retention/repatriation or transfer of profits to overseas branches/centres banks were asked to analyse all relevant aspects including inter alia the business plans, home, and host country regulatory requirements and performance parameters of their overseas centers. Banks shall also ensure compliance with all applicable home and host country laws and regulations, RBI said.
The circular dated December 8, 2021, of the regulator, said that “Banks shall report all such instances of infusion of capital and/ or retention2/transfer/ repatriation of profits in overseas branches and subsidiaries within 30 days of such action, to the Chief General Manager-in-Charge, Department of Regulation, Central Office, Mumbai with a copy to Chief General Manager-in-Charge, Department of Supervision, Central Office, Mumbai”.
