No specific deadline for agreement between ESMA, RBI, says deputy governor T Rabi Sankar

The Reserve Bank of India’s (RBI) Deputy Governor T Rabi Sankar on November 7 said that there is no specific deadline for the agreement between European Securities and Markets Authority (ESMA) and Indian banking regulator after the deadline has passed last month.

“The issue now is that the deadline two years ago has passed. The country’s regulators of European bank had given them some more time the end of October this year, but they come back and said that you work to ensure that you adhere to ESMA requirements. There is no specific deadline now,” Sankar said during the Business Standard BFSI Insight Summit in Mumbai.

The dispute between Indian banking regulator and ESMA has erupted after the latter in October 2022 de-recognised the Clearing Corporation of India Limited (CCIL), due to a lack of audit and inspection rights over the local clearing house.

This move by the ESMA had created a significant obstacle for European banks, which conduct billions of dollars in bond and swap transactions through the CCIL. The regulators in France and Germany granted a temporary extension until October 2024 for their banks to trade with the CCIL, a long-term solution remains elusive.