RBI Proposes New Norms for Foreign Branch Establishment
The Reserve Bank of India has released draft regulations to simplify the process for foreign entities to establish branches or offices in India. This initiative aims to offer greater operational freedom through a principle-based approach. The draft is open for stakeholder feedback until October 24, 2025.
- Country:
- India
The Reserve Bank of India (RBI) announced on Friday its plan to relax the norms for foreign entities seeking to establish branches or offices within the country. The proposal came through the issuance of 'Draft Foreign Exchange Management (Establishment in India of a branch or office) Regulations, 2025'.
According to the RBI, the draft seeks to move away from a prescriptive framework to a more principle-based approach, offering greater operational liberty. Additionally, the criteria for setting up a place of business in India are proposed to be eased to attract more foreign establishments.
The draft outlines that an Entity Resident Outside India (EROI) must apply using a specified form to a designated bank. Post approval, the bank will notify the RBI, which will then issue a Unique Identification Number (UIN). Countries requiring prior government approval for this include Pakistan, Afghanistan, Bangladesh, China, Hong Kong, Macau, and Sri Lanka.
(With inputs from agencies.)
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