RBI notification on allowing OBUs in SEZs soon

NEW DELHI: In a significant concession, the government is considering allowing any bank in India to set up branches in Special Economic Zones as overseas sanking units.
This is a far relaxed version of the earlier proposal, according to which only banks which have licence to operate a ''bank'' in India could set up OBUs in these zones.
According to the earlier proposal, only if a foreign bank is granted a licence to operate a bank in India it could set up an OBU in the SEZs.
Sources said the concession was expected to make these zones even more attractive.
The overseas banking units would be exempt from cash reserve ratio, statutory reserve ratio and give access to SEZ units and SEZ developers to international finances at international rates.
The Reserve Bank of India is expected to issue a notification to allow overseas banking units to operate in Special Economic Zones within the next few days, they said.
Commerce and Industry Minister Murasoli Maran had announced the setting up of OBUs in SEZs in the five-year Exim policy announced on March 31.
According to the announcement made in the Exim policy, the OBUs will be virtually foreign branches of Indian banks but located in India.