Minimum Capital Requirements for 'Other Financial Services' activities which are unregulatedis allowed under Government Route
RBI said modification has been made based on suggestions from stakeholders to consider minimum prescribed regulatory capital at the parent level rather than at the IBU level.
"With a view to enabling IBUs to start their operations, the parent bank will be required to provide a minimum capital of USD 20 million or equivalent in any foreign currency to its IBU which should be maintained at all times," it said in a notification.
However, it added the minimum prescribed regulatory capital, including for the exposures of the IBU, should be maintained on an on-going basis at the parent level.
Also, the parent bank will be required to provide a Letter of Comfort for extending financial assistance, as and when required, in the form of capital/liquidity support to IBU.
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