© Reuters. FILE PHOTO: FILE PHOTO: A Reserve Financial institution of India (RBI) brand is seen inside its headquarters in Mumbai, India, April 6, 2023. REUTERS/Francis Mascarenhas//o/File Picture
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MUMBAI (Reuters) – The central banks of India and England on Friday signed an settlement on info trade for settlement of bond trades, the Reserve Financial institution of India (RBI) stated.
In India, bonds are settled by way of the Clearing Company of India (CCIL).
Below the brand new settlement, the Financial institution of England (BoE) will assess and recognise CCIL as a counterparty to clear and settle bonds and in a single day listed swap trades completed by England-based banks and traders.
The 2 central banks have additionally established a framework for the BoE to depend on the Indian central financial institution’s regulatory and supervisory actions, whereas safeguarding the UK’s monetary stability, the RBI stated.
In October final 12 months, the European Securities and Markets Authority had withdrawn recognition of six Indian clearing counterparties, together with CCIL, efficient from April.
This meant that European banks needed to settle their India-based trades by way of banks based mostly in different jurisdictions.
Subsequently, CCIL additionally required a contemporary utility for BoE’s recognition.
The brand new settlement demonstrates the significance of cross-border cooperation to facilitate worldwide clearing actions and the BoE’s dedication to deference to different regulators’ regimes, the RBI stated.
