RBI loosens offshore structured products restrictions

Author: Ashley Lee | Published: 5 Jun 2014
The central bank measure lets Indian banks compete with international rivals on structured products
India’s banking regulator has allowed domestic banks’ offshore branches in global financial centres to sell structured products that are banned onshore. But the onshore market remains closed.

The Reserve Bank of India’s (RBI) May 12 notification allows these branches to sell structured financial and derivative products - a small step forward for Indian structured finance. But the reforms do not advance the highly anticipated opening of the domestic market.

Structured and derivative products sold in India must receive RBI approval, limiting their development and complexity. That also means Indian banks have less experience in this space, and it’s unclear...