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Overseas bank branches have to follow rules: RBI
New Delhi, Aug 08: The Reserve Bank has directed PSU banks having overseas branches to fully comply with regulatory requirements of the foreign country, in the face of stiff penalties imposed on two overseas branches of SBI.
New Delhi, Aug 08: The Reserve Bank has directed PSU banks having overseas branches to fully comply with regulatory requirements of the foreign country, in the face of stiff penalties imposed on two overseas branches of SBI.
"RBI has advised the banks to take all possible steps to ensure that their overseas branches comply with regulatory requirements of the host country regulators without leaving any scope for adverse observations," official sources said.
The move comes after decline in profitability of some of the banks like State Bank of India.
US regulator imposed a Civil Money Penalty of $7.5 million on SBI's New York branch for "perceived unsafe and unsound practices".
This was despite the fact that no actual violation was noticed, sources said.
In another instance, German regulator had imposed a fine of 1.8 million deutsche marks on SBI's Frankfurt branch in August 2001, for breach in exposure limits in a single group.
Bureau Report
The move comes after decline in profitability of some of the banks like State Bank of India.
US regulator imposed a Civil Money Penalty of $7.5 million on SBI's New York branch for "perceived unsafe and unsound practices".
This was despite the fact that no actual violation was noticed, sources said.
In another instance, German regulator had imposed a fine of 1.8 million deutsche marks on SBI's Frankfurt branch in August 2001, for breach in exposure limits in a single group.
Bureau Report