Accil News Today

The continuation of a 14-month tussle with the RBI regarding the oversight of Clearing Corp of India (CCIL) will likely put French and German banks at a severe disadvantage relative to other foreign banks operating in India, especially after the UK formally recognised the local bond clearing house.

Days after the Reserve Bank of India (RBI) and the Bank of England (BoE) reached an agreement on cooperation regarding the Clearing Corporation of India (CCIL), central bank governor Shaktikanta Das called upon other regulators to accept the same principles amid an ongoing tussle with European authorities.

Reserve Bank of India (RBI) and Bank of England (BoE) on Friday signed a Memorandum of Understanding (MoU) concerning cooperation and exchange of information in relation to the Clearing Corporation of India Limited (CCIL).

People aware of the developments said the new Memorandum of Understanding being worked upon by the RBI and UK authorities, including the Bank of England, would essentially communicate a "hands-off" approach towards the CCIL on potentially contentious issues such as rights of audit over the Indian clearing house.

"Banks and CCIL are in talks for the third-party clearing mechanism. In its securities settlement segment, the CCIL permitted certain members to become clearing members in 2020," a source aware of the developments told ET. "Clearing members can take on the European banks as clients and trades can be carried out."

"There will be an increase in bond volumes as we head near the JP Morgan index inclusion in June," a source aware of the matter said. "There could be a need for authorities to see if it is necessary for foreign trade reporting time or trade time on the Clearing Corporation of India (CCIL) to be extended."

The European Securities and Markets Authority (ESMA) has reportedly proposed to the Reserve Bank of India (RBI) to continue their existing Memorandum of Understanding (MoU) on the treatment of clearing houses. This comes amid a standoff between the Indian central bank and European authorities over the latters requirement of rights of audit and inspection of domestic clearing houses.

“The RBI sent a draft to the ESMA in the first week of July, there are some dilutions in the language, but they have not made any relaxations on the sticking point, which is the right to audit, inspect and potentially levy fines on the CCIL,” a source aware of the development said.

“The RBI sent a draft to the ESMA in the first week of July, there are some dilutions in the language, but they have not made any relaxations on the sticking point, which is the right to audit, inspect and potentially levy fines on the CCIL,” a source aware of the development said.

It's time to take in the sights and sounds of the Children's Art and Literacy Festival in downtown Abilene. The CALF kicks off with a costume contest and parade.