RBI issues norms for branch offices by foreign entities

Further, the central bank approval will be required
in cases where the applicant is a citizen of or is
registered/incorporated in Pakistan; the applicant
is a citizen of or is registered/ incorporated in
Bangladesh, Sri Lanka, Afghanistan, Iran, China,
Hong Kong or Macau and the application is for
opening a BO/LO/PO in Jammu and Kashmir,
North East region and Andaman and Nicobar
Islands; and the applicant is a Non-Government
Organisation (NGO), a Non-Profit Organisation,
or a Body/ Agency/ Department of a foreign
government.
According to the RBI, the non-resident entity desirous of establishing a BO/LO in India should
have a financially sound track record.
An applicant that is not financially sound and is a
subsidiary of another company may submit a
Letter of Comfort (LOC) from its parent/ group
company, subject to the condition that the parent/
group company satisfies the prescribed criteria
for net worth and profit. The LOC should be
issued by the applicant's parent / group company
which undertakes to fund the operations if
required.
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