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With a view to providing operational flexibility to banks, Reserve Bank of India (RBI) has said banks will be allowed to infuse capital in their overseas branches as well as repatriate profits without seeking its prior approval, subject to fulfilling of certain regulatory capital requirements. At present, banks incorporated in India can infuse capital in their overseas branches and subsidiaries, retain profits in these centres and repatriate/ transfer the profits with prior approval of the RBI.

RBI Governor Shaktikanta Das said in view of the subsequent significant developments in the global standards on classification, measurement and valuation of investments, the linkages with the capital adequacy framework as well as progress in the domestic financial markets, there is a need to review and update these norms.

In view of the imminent discontinuance of London Interbank Offered Rate (LIBOR), Das said any widely accepted interbank rate or Alternative Reference Rate (ARR) applicable to the currency of borrowing may be used as a benchmark, post discontinuation. Currently, the benchmark rate for Foreign Currency (FCY) External Commercial Borrowings (ECB)/Trade Credit (TC) is specified as six-month LIBOR rate or any other six-month interbank interest rate applicable to the currency of borrowing.