The Reserve Bank of India (RBI) and the Bank of England (BoE) on Friday signed an agreement for cooperation and exchange of information related to Clearing Corporation of India Ltd (CCIL).
The agreement will help facilitate British lenders to continue settling bond and forex trades on CCIL. The move will help Bank of England assess the CCIL’s application to be recognised as a third country counterparty, essential to UK banks settle transactions through it, the RBI said in a statement on Friday.
The accord would pave the way for British banks like Barclays and Standard Chartered, with a significant presence in India, to continue trading in the South Asian nation using the CCIL platform.
Regulated by the RBI, CCIL hosts the trading platform for government bonds and overnight indexed swaps.“The memorandum of understanding (MoU) establishes a framework for the Bank of England (BoE) to place reliance on the RBI’s regulatory and supervisory activities while safeguarding the UK’s financial stability,” RBI said in a statement.
“The MoU also demonstrates the importance of cross-border cooperation to facilitate international clearing activities and the BoE’s commitment to deference to other regulators’ regimes,” it added.
The MoU was signed by RBI deputy governor T Rabi Sankar and BoE deputy governor for financial stability Sarah Breeden in London.
In October 2022, the European Securities and Markets Authority (ESMA) announced that it was derecognising six Indian clearing houses, including CCIL, with effect from April 30. This came as the ESMA insisted on auditing and inspecting India’s clearing corporations.