The Ministry of Finance (MoF) on February 28, 2024, issued a notification to modify certain provisions of the Banking Regulation Act, 1949.
The following modification has been stated:
• In section 19 which states Restriction on the nature of subsidiary companies, after sub-section (2), the following subsection shall be inserted, namely:-
‘(2A) Notwithstanding anything contained in sub-section (2), the limits mentioned therein shall not apply to an International Financial Services Centres Banking Unit of a Foreign Bank-
(a) for a transaction entered in the ordinary course of business in respect of a company where the shareholding is held by way of security, whether as a pledge, mortgage or by any other similar mode; or
(b) if the shareholding or interest acquired or held in the course of satisfaction of debts due to it, is disposed of at the earliest but not later than five years:
Provided that the period of five years referred to in clause (b) may be extended by the International Financial Services Centres Authority, for reasons to be recorded in writing.
Explanation. - For the purposes of this sub-section and subsection (1) of section 20, -
(i) "International Financial Services Centres Banking Unit" means a financial institution defined under clause (c) of sub-section (1) of section 3 of the International Financial Services Centres Authority Act, 2019 (50 of 2019);
(ii) "Foreign Bank” shall have the same meaning as assigned to it in clause (d) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Banking) Regulations, 2020.’.
• In section 20 which states Restrictions on loans and advances, after sub-section (1), the following proviso shall be inserted, namely:-
"Provided that the restrictions mentioned in sub-section (1) shall not apply to loans and advances made by an International Financial Services Centres Banking Unit of a Foreign Bank.”.
[Notification No. S.O. 942(E)]
