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RBI seeks details of deals routed through OCBs

Rajalakshmi Menon

MUMBAI, July 27

THE Reserve Bank of India has asked banks to submit details of various transactions that are routed through overseas corporate bodies (OCBs). The RBI also asked banks to confirm if they were following rules and regulations with regard to OCBs.

In a letter dated July 26, the central bank has asked for ``a certificate from auditors that all transactions pertaining to sale or purchase of shares for or on account of all OCBs for which bank branches are acting as designated authorised dealer branch , are in conformity with the rules and regulations made under the FEMA Act.''

The RBI has also asked banks for a confirmation if adequate systems are in place to ensure compliance with the terms and conditions.

Banks have been asked to furnish information or documents related to the list of OCBs -- name and address, including place of incorporation -- for which bank branches are acting as designated branch of authorised dealer.

The RBI inquiry into banks' OCB exposures follows reports of several OCBs routing foreign exchange out of the country through the Mauritius route.

``The RBI is trying to find out if there are any discrepancies in the present rules and regulations. The central bank may collate the information that it gathers from various banks and pass it on to the Finance Ministry,'' said one banker.

Bankers said that it was possible that a lock-in period, similar to the one in existence a couple of years ago, may come into force to prevent OCBs from routing foreign exchange out of the country.