RBI allowed banks to sell structured products overseas
By Neelima Shankar
May 13, 2014
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Last day apex bank of the country – RBI stated that Indian banks can now provide the structured derivative overseas. RBI said that but they could sell these products only in established financial markets. RBI has allowed the banks to sell these products through foreign even if they are not allowed in India.

Foreign branches can sell these products only in the well established branches outside the country such as New York, London, Singapore, Hong Kong, Frankfurt and Dubai, where as the other centers the bank can offer only those products that are domestically permitted in the country. RBI has also instructed that before selling these products foreign branches should have proper knowledge regarding the risk management capabilities to handle such products.

The change marks a revision of rules passed in 2008 that required domestic banks to secure RBI's approval before offering complex derivative products, which weren't allowed here, abroad. RBI strictly stated that banks must follow the suitability and appropriateness policy, and must follow the stringent host and home regulations, in terms of these products.

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