Norms eased for easier access to foreign funds by banks

Banks can now borrow from international financial institutions for general banking business without seeking RBI’s permission, thus making it easier and more flexible to access foreign funds.

"With a view to providing greater flexibility in seeking access to overseas funds, it has now been decided to permit banks to borrow from international/multilateral financial institutions without approaching Reserve Bank for a case by case approval," the RBI said.

The flexibility has been provided for international/ multilateral financial institutions of which Indian Government is a shareholding member or which have been established by more than one government or have shareholding by more than one government and other international organisations.

RBI clarified that such borrowings should not be for capital augmentation.

In another circular, RBI allowed all non-deposit taking NBFCs to act as sub-agents under Money Transfer Service Schemes (MTSS) without seeking prior approval from it.

Deposit accepting non-banking financial companies (NBFCs) are however, not permitted to undertake such activity, RBI added.

As per an August 2014 circular, NBFCs desirous to act as sub-agents under the MTSS required prior approval of the RBI.

The August circular has been reviewed in the "light of certain representations" received by the Reserve Bank.