<p>The Reserve Bank of India (RBI) has eased norms for foreign banks to help them meet capital adequacy requirement as per the central bank norms.<br /><br /></p>.<p>“A few banks represented that debit balances in the head office account due to placements with the overseas branches may happen as a part of normal banking business and complete denial of such exposure may not be practical and consistent with the principle of non-disruptive regulation,” RBI said.<br /><br />Accordingly, it has been advised to include some of the net overseas placements with head office or other overseas branches or other group entities to be calculated as Tier-I capital or equity capital. <br /><br />If the above exceeds 10 per cent of the bank’s minimum capital adequacy ratio requirement, the amount in excess of this limit would be deducted from Tier I capital or equity capital, it said. <br /></p>
<p>The Reserve Bank of India (RBI) has eased norms for foreign banks to help them meet capital adequacy requirement as per the central bank norms.<br /><br /></p>.<p>“A few banks represented that debit balances in the head office account due to placements with the overseas branches may happen as a part of normal banking business and complete denial of such exposure may not be practical and consistent with the principle of non-disruptive regulation,” RBI said.<br /><br />Accordingly, it has been advised to include some of the net overseas placements with head office or other overseas branches or other group entities to be calculated as Tier-I capital or equity capital. <br /><br />If the above exceeds 10 per cent of the bank’s minimum capital adequacy ratio requirement, the amount in excess of this limit would be deducted from Tier I capital or equity capital, it said. <br /></p>