In a significant move towards fostering international cooperation, the Reserve Bank of India (RBI) and the Bank of England (BoE) have formally entered into a Memorandum of Understanding (MoU) to facilitate collaboration and information exchange concerning the Clearing Corporation of India Limited (CCIL).
Under this newly signed MoU, the Bank of England is set to rely on the regulatory and supervisory activities of the Reserve Bank of India, underscoring a commitment to safeguarding the stability of the United Kingdom’s financial sector. This collaborative framework emphasizes the necessity of cross-border cooperation in facilitating international clearing activities, demonstrating the BoE’s dedication to deference to regulatory regimes of other jurisdictions.
The MoU reaffirms the shared interests of both regulatory bodies in enhancing cooperation in alignment with their respective laws and regulations. Importantly, it provides the Bank of England with the means to evaluate CCIL’s application for recognition as a third country Central Counterparty (CCP). Such recognition is a prerequisite for UK-based banks seeking to clear transactions through CCIL.
The official signing took place in London, where RBI Deputy Governor T Rabi Sankar and BoE Deputy Governor for Financial Stability Sarah Breeden executed the MoU.