RBI EASES NORMS FOR BANK SUBSIDIARIES/JV

In a move that could significantly ease bank investment in their non-banking activities such as insurance and financial services, the Reserve Bank of India has exempted their joint ventures and overseas subsidiaries from an investment limit on affiliates. Earlier norms on para-banking activities stated that investment by a bank in a subsidiary company, financial services company, financial institutions and stock and other exchanges could not exceed 10 % of its paid-up share capital and
reserves. On a cumulative basis, the limit was fixed at 20 % of the bank’s paid-up capital and reserves.