Page 7 - Banking Finance December 2022

RBI CORNER

Reserve Bank

News

RBI signs currency swap the credibility and strength of Indian India to exempt smaller loans from the
regulations. That is what we are trying rules taking effect next month that are
pact with Maldives
to impress upon them," Das said in the in line with those covering banks.
The Reserve Bank of India has signed post-policy interaction with the media.
India had 10,000 shadow banks as of
an agreement to extend up to $200
In October this year, European Securi- March 2021, the latest RBI data avail-
million currency swap facility to
ties and Markets Authority (ESMA) able, with assets of 54 trillion rupees
Maldives Monetary Authority (MMA)
announced that it will withdraw the ($680 billion) or about one-fourth that
under the SAARC Currency Swap
recognition of six Indian third country of the banking sector. Several of the
Framework.
central counterparties (TC-CCPs) - the biggest shadow banks are listed on the
"This agreement will enable the MMA Clearing Corporation of India (CCIL), stock exchanges.
to make drawals in multiple tranches Indian Clearing Corporation Ltd (ICCL),
up to a maximum of $200 million from NSE Clearing Ltd (NSCCL), Multi Com-
RBI issues Rs. 1.71 crore of
the RBI," a press release said. modity Exchange Clearing (MCXCCL),
India International Clearing Corpora- digital rupee for retail pi-
The facility is to provide swap support
tion (IFSC) Ltd (IICC) and NSE IFSC Clear-
as a backstop line of funding for short lot day 1
ing Corporation Ltd (NICCL) - under the
term foreign exchange liquidity re- The pilot project for central bank digi-
European Market Infrastructure Regu-
quirements, it said. tal currency (CBDC) in the retail seg-
lation (EMIR) regime. It, however, said
In 2020, the RBI had signed a similar ment went live with the Reserve Bank
the withdrawal decision will come into
pact for extending up to $400-million effect from May 1, 2023. The Bank of of India (RBI) issuing Rs 1.71 crore to
currency swap facility to Sri Lanka. four participating banks based on their
England also took a similar decision.
indents.
Trust credibility of Indian RBI unlikely to give The central bank has identified four
banks for the first phase of the pilot -
norms: RBI to foreign shadow banks bad-loan
State Bank of India, ICICI Bank, Yes
regulators exemptions Bank and IDFC First Bank - in four cit-
Amid European financial market regula- RBI is unlikely to give "shadow banks" ies, Mumbai, New Delhi, Bengaluru
tors' decision to de-recognise domestic exemptions from stricter bad-loan rules and Bhubaneswar. The highest indent
clearing corporations, the Reserve Bank coming into force, sources told, essen- was received from one private sector
of India governor Shaktikanta Das said tially ending an advantage the non- bank.
that the foreign regulators should trust bank financial firms have had over stan-
While the pilot was started with Rs
the credibility of Indian regulations. dard banks.
1.71 crore of digital currency, but de-
"It is also necessary for regulators on Non-banking financial companies pending on the user demand and bank's
the other side to appreciate and trust (NBFCs) have asked the Reserve Bank of liquidity requirements, the token in-

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