The Reserve Bank of India (RBI) and the Bank of England (BoE) have signed a Memorandum of Understanding (MoU) on collaboration and information sharing regarding the Clearing Corporation of India Limited (CCIL). This Memorandum of Understanding (MoU), which ensures the stability of the UK financial sector, establishes the foundation for BoE to depend on RBI’s regulatory and supervisory measures.
The agreement emphasises how important international cooperation is to enabling international clearing operations and how dedicated BoE is to upholding the frameworks of other authorities. With the use of BoE’s tiering approach, incoming CCPs can be identified and designated as “Tier 1,” under the primary supervision of their home authority. In India, RBI is in charge of monitoring CCPs that deal with a range of financial products.
This MoU is in compliance with the laws of both countries; it highlights the improvement of cooperation and supports CCIL’s application to be recognized as a third-country Central Counterparty (CCP), which is necessary in order for UK banks to transact through CCIL. Considering the UK EMIR requirements for recognition of Covered CCPs, the MoU promotes collaboration even though RBI is not subject to the UK’s European Market Infrastructure Regulation (EMIR) rules.
On December 1, 2023, in London, BoE Deputy Governor for Financial Stability Sarah Breeden and RBI Deputy Governor T Rabi Sankar signed the agreement.