RBI sees European proposal for oversight of clearing corp as 'extra jurisdictional', official says

Mumbai: India's central bank continues to be in talks with the European Securities and Markets Authority (ESMA) but views the latter's proposal for supervisory and auditing powers over domestic clearing corporations as "extra jurisdictional", an official said on Thursday.

"We have taken a very consistent stand that ESMA is being extra jurisdictional in telling us how we should do regulation," Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar said at an event.

"There is no way we can agree to that. It is not possible to agree to that without compromising on your sovereignty of policymaking," Sankar said.

In October 2022, ESMA, the European Union's financial markets regulator and supervisor, withdrew recognition from six Indian central clearing houses but gave some time to European banks to continue dealing with them while it negotiated with the RBI for greater oversight.

That deadline for European banks to continue settling via Indian clearing corporations ended on Oct. 31.

But these lenders have continued to use local clearing houses, Sankar said.

"There is no specific extension in deadline" for French and German banks to continue transacting via the Clearing Corporation of India, he said.