• About Us
  • Contact Us
Wednesday, February 8, 2023
  • Login
  • Register
B2B Infomedia
No Result
View All Result
  • Home
  • Fintech
    Credit card numbers continue to slip after RBI’s deactivation order

    PayU’s LazyPay, Kissht blocked after IT Ministry’s order

    Credit card numbers continue to slip after RBI’s deactivation order

    Digital economy push offers hope for multiple players: Mastercard

    PayU reports over 50% jump in revenue, clocks net profit of Rs 126 crore

    Paytm Payments Bank gets final RBI nod to operate as Bharat Bill Payment Operating Unit

    Indian Bank to hold vostro A/cs of 3 Sri Lankan banks

    Indian Bank expands digital offerings under ‘Project WAVE’ initiative

    India records over 23 billion digital payments worth Rs 38.3 lakh crore in Q3

    Cabinet approves promotional incentives worth Rs 2,600 crore for Rupay debit cards, low value UPI transactions

    RBI response sought on PIL seeking uniform banking code for forex transactions

    Reserve Bank of India puts on hold NUE licensing

  • BFSI
    Credit card numbers continue to slip after RBI’s deactivation order

    PayU’s LazyPay, Kissht blocked after IT Ministry’s order

    Leading NBFCs offer up to 8.84% to attract retail savings

    NBFC-MFIs dominate microfinance market, says new report

    Banks’ exposure to Adani group ‘insufficient’, face limited risk: Fitch

    Banks’ exposure to Adani group ‘insufficient’, face limited risk: Fitch

    Moody’s says bank exposure to Adani not large to affect credit quality

    Moody’s says bank exposure to Adani not large to affect credit quality

    Banks to tap intelligence agencies before loans to ex-defaulters

    Banking laws recast likely to protect bankers from Lokpal

    HSBC confident it can serve an aspirational India going global

    HSBC confident it can serve an aspirational India going global

  • Education
    Education ministry sets up panel to strengthen assessment, accreditation of higher educational institutions

    Thousands of orphans will get opportunity to study at DU free of cost: VC

    Increase in SC, ST and OBC students enrolment in higher education institutions: AISHE 2020-21

    Increase in SC, ST and OBC students enrolment in higher education institutions: AISHE 2020-21

    AISHE 2020-21: Enrolment of Muslim students for higher education decreases to 4.6%

    AISHE 2020-21: Enrolment of Muslim students for higher education decreases to 4.6%

    IIM Raipur introduces executive certificate programme for Strategic Chief Marketing officers

    IGNOU launches PG diploma Journalism; course available in three languages

    UPCON and Jadooz to set up edutainment centres called ‘Magic Rooms’ in rural Uttar Pradesh

    School dropout rate declines, gender parity improves: Economic Survey

    Entry of foreign varsities in India will lead to healthy competition: Private Universities’ VCs

    Gender gap in undergraduate programmes widens, gains of last few years lost to pandemic: AISHE Report

  • Enterprise
    Leading NBFCs offer up to 8.84% to attract retail savings

    NBFC-MFIs dominate microfinance market, says new report

    Moody’s says bank exposure to Adani not large to affect credit quality

    Moody’s says bank exposure to Adani not large to affect credit quality

    SBI says further financing to Adani projects to be evaluated on merit

    Don’t see loan exposure to Adani as an issue for SBI, says CreditSights

    IL&FS to distribute Rs 3,200 crore to IFIN creditors

    IL&FS to distribute Rs 3,200 crore to IFIN creditors

    Banks to tap intelligence agencies before loans to ex-defaulters

    Banks to face margin pressure next fiscal, net interest margin may fall by 10 basis points to 3.45%: Fitch

    Bonds out, Adani Group looks for new ways to refinance ACC, Ambuja M&A loans

    Bonds out, Adani Group looks for new ways to refinance ACC, Ambuja M&A loans

  • Technology
    Credit card numbers continue to slip after RBI’s deactivation order

    PayU’s LazyPay, Kissht blocked after IT Ministry’s order

    Web Werks – Iron Mountain JV launches its First Greenfield Data Center in Mumbai

    Web Werks – Iron Mountain JV launches its First Greenfield Data Center in Mumbai

    New Course by IITs: BTech in Computational Engineering

    New Course by IITs: BTech in Computational Engineering

    Niti Aayog’s AIM, CBSE, Intel India collaborate to bring change in education sector

    Niti Aayog’s AIM, CBSE, Intel India collaborate to bring change in education sector

    Indian Bank to hold vostro A/cs of 3 Sri Lankan banks

    Indian Bank expands digital offerings under ‘Project WAVE’ initiative

    India records over 23 billion digital payments worth Rs 38.3 lakh crore in Q3

    Cabinet approves promotional incentives worth Rs 2,600 crore for Rupay debit cards, low value UPI transactions

  • Events
    • Upcoming Events
    • Past Events
  • Home
  • Fintech
    Credit card numbers continue to slip after RBI’s deactivation order

    PayU’s LazyPay, Kissht blocked after IT Ministry’s order

    Credit card numbers continue to slip after RBI’s deactivation order

    Digital economy push offers hope for multiple players: Mastercard

    PayU reports over 50% jump in revenue, clocks net profit of Rs 126 crore

    Paytm Payments Bank gets final RBI nod to operate as Bharat Bill Payment Operating Unit

    Indian Bank to hold vostro A/cs of 3 Sri Lankan banks

    Indian Bank expands digital offerings under ‘Project WAVE’ initiative

    India records over 23 billion digital payments worth Rs 38.3 lakh crore in Q3

    Cabinet approves promotional incentives worth Rs 2,600 crore for Rupay debit cards, low value UPI transactions

    RBI response sought on PIL seeking uniform banking code for forex transactions

    Reserve Bank of India puts on hold NUE licensing

  • BFSI
    Credit card numbers continue to slip after RBI’s deactivation order

    PayU’s LazyPay, Kissht blocked after IT Ministry’s order

    Leading NBFCs offer up to 8.84% to attract retail savings

    NBFC-MFIs dominate microfinance market, says new report

    Banks’ exposure to Adani group ‘insufficient’, face limited risk: Fitch

    Banks’ exposure to Adani group ‘insufficient’, face limited risk: Fitch

    Moody’s says bank exposure to Adani not large to affect credit quality

    Moody’s says bank exposure to Adani not large to affect credit quality

    Banks to tap intelligence agencies before loans to ex-defaulters

    Banking laws recast likely to protect bankers from Lokpal

    HSBC confident it can serve an aspirational India going global

    HSBC confident it can serve an aspirational India going global

  • Education
    Education ministry sets up panel to strengthen assessment, accreditation of higher educational institutions

    Thousands of orphans will get opportunity to study at DU free of cost: VC

    Increase in SC, ST and OBC students enrolment in higher education institutions: AISHE 2020-21

    Increase in SC, ST and OBC students enrolment in higher education institutions: AISHE 2020-21

    AISHE 2020-21: Enrolment of Muslim students for higher education decreases to 4.6%

    AISHE 2020-21: Enrolment of Muslim students for higher education decreases to 4.6%

    IIM Raipur introduces executive certificate programme for Strategic Chief Marketing officers

    IGNOU launches PG diploma Journalism; course available in three languages

    UPCON and Jadooz to set up edutainment centres called ‘Magic Rooms’ in rural Uttar Pradesh

    School dropout rate declines, gender parity improves: Economic Survey

    Entry of foreign varsities in India will lead to healthy competition: Private Universities’ VCs

    Gender gap in undergraduate programmes widens, gains of last few years lost to pandemic: AISHE Report

  • Enterprise
    Leading NBFCs offer up to 8.84% to attract retail savings

    NBFC-MFIs dominate microfinance market, says new report

    Moody’s says bank exposure to Adani not large to affect credit quality

    Moody’s says bank exposure to Adani not large to affect credit quality

    SBI says further financing to Adani projects to be evaluated on merit

    Don’t see loan exposure to Adani as an issue for SBI, says CreditSights

    IL&FS to distribute Rs 3,200 crore to IFIN creditors

    IL&FS to distribute Rs 3,200 crore to IFIN creditors

    Banks to tap intelligence agencies before loans to ex-defaulters

    Banks to face margin pressure next fiscal, net interest margin may fall by 10 basis points to 3.45%: Fitch

    Bonds out, Adani Group looks for new ways to refinance ACC, Ambuja M&A loans

    Bonds out, Adani Group looks for new ways to refinance ACC, Ambuja M&A loans

  • Technology
    Credit card numbers continue to slip after RBI’s deactivation order

    PayU’s LazyPay, Kissht blocked after IT Ministry’s order

    Web Werks – Iron Mountain JV launches its First Greenfield Data Center in Mumbai

    Web Werks – Iron Mountain JV launches its First Greenfield Data Center in Mumbai

    New Course by IITs: BTech in Computational Engineering

    New Course by IITs: BTech in Computational Engineering

    Niti Aayog’s AIM, CBSE, Intel India collaborate to bring change in education sector

    Niti Aayog’s AIM, CBSE, Intel India collaborate to bring change in education sector

    Indian Bank to hold vostro A/cs of 3 Sri Lankan banks

    Indian Bank expands digital offerings under ‘Project WAVE’ initiative

    India records over 23 billion digital payments worth Rs 38.3 lakh crore in Q3

    Cabinet approves promotional incentives worth Rs 2,600 crore for Rupay debit cards, low value UPI transactions

  • Events
    • Upcoming Events
    • Past Events
No Result
View All Result
B2B Infomedia
No Result
View All Result
Home BFSI

Central bank digital currency could end RBI-ESMA row

The newly launched CBDC system, used as a pilot in government security trades earlier this month, could be an alternative, obviating the need for European inspection as the central bank itself is the clearing custodian here.

Prashant Dwivedi by Prashant Dwivedi
November 10, 2022
in BFSI, Technology
A A
0
RBI imposes Rs 1.76 crore penalty on Vakrangee for non-compliance with regulations
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

The deadlock between the Reserve Bank of India (RBI) and the European Securities and Market Authority (ESMA) over the inspection of Indian financing clearing houses may be broken by a new-age product – the central bank digital currency, or CBDC.

The newly launched CBDC system, used as a pilot in government security trades earlier this month, could be an alternative, obviating the need for European inspection as the central bank itself is the clearing custodian here.

To be sure, the CBDC system’s bilateral nature, lack of clarity on capital requirements and initial stages of use-case applications are potential problems requiring solutions.

Although market participants are hopeful that both regulators will come to a middle path over inspections, they are wary of the implications of a prolonged logjam.

European lenders such as HSBC, Deutsche, Standard Chartered, Barclays and BNP Paribas make up anything between 15% and 25% of the trades in the so-called negotiated dealing system order matching segment (NDS-OM) run by the Clearing Corporation of India Ltd (CCIL), which is one of the central counterparties for settlement of trades.

“The RBI does not want any foreign agencies inspecting entities regulated by it, which is a fair point. But in the current situation where it has been implemented the world over, it is difficult to make an exception here,” said a senior banking executive. “India needs these institutions here more and not complying with these norms will mean an unsustainable capital charge on banks, which could force them to pull out of the country.”

Currently, banks have to set aside about 2.5% in capital which means about ₹2.5 crore for every ₹100 crore of trades. If the Indian central counterparties fail to comply with ESMA regulations this could go up by about 50 times, making business unsustainable.

The main advantage of a central counterparty like CCIL is that it allows multilateral netting of deals. Meaning, a bank can settle multiple deals with different participants through the system ensuring payments and receivables are netted off.

Earlier this month, the RBI-backed CBDC made its debut as a pilot; it is a real-time gross settlement system. In other words, here transactions are settled on a one-on-one basis between banks. On the first day, nearly 50 government bond transactions cumulatively worth about ₹275 crore were settled on the system. But bankers are wary of whether it can replace trades on CCIL.

“Yes there is an opportunity because it is an instant settlement system, but still risk management, liquidity and how trades will be netted off is an issue. A better solution is for the regulators to come to some sort of understanding,” said a second senior banking executive.

Under CBDC, a digital currency account is maintained with the RBI and banks will have to first transfer money to this account from their respective current accounts.

If bank X is buying bonds from bank Y, the CBDC account of X will be debited, with a corresponding credit in the same account of bank Y. But trades will be settled on the same day unlike the next-day settlement prevalent now. The balance in CBDC accounts will be sent back to the bank’s current account.

Bankers, however, say that it is too early to use CBDC for government bond trades extensively. Lawyers said the RBI’s views will have to be taken before even the government takes its decision.

“Securities law does not override RBI and since this also has foreign currency and cross border implications, the government also will need to take RBI’s views,” said Arka Mukherjee, partner at J Sagar Associates.

0Like
0Dislike
50% LikesVS
50% Dislikes
Source: Economic Times
Tags: CBDCdigital currencyEuropean Securities & Market Authoritiesrbi
Previous Post

Tejas Shah joins Prince Pipes and Fittings as Head IT Applications

Next Post

Indian financial regulators may rebuff Europe demands: Sources

Prashant Dwivedi

Prashant Dwivedi

Related Posts

Credit card numbers continue to slip after RBI’s deactivation order
Technology

PayU’s LazyPay, Kissht blocked after IT Ministry’s order

February 8, 2023
Leading NBFCs offer up to 8.84% to attract retail savings
Enterprise

NBFC-MFIs dominate microfinance market, says new report

February 8, 2023
Banks’ exposure to Adani group ‘insufficient’, face limited risk: Fitch
BFSI

Banks’ exposure to Adani group ‘insufficient’, face limited risk: Fitch

February 8, 2023
Next Post
RBI imposes Rs 1.76 crore penalty on Vakrangee for non-compliance with regulations

Indian financial regulators may rebuff Europe demands: Sources

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

14th NBFC & FINTECH CONCLAVE & AWARDS 2023
Subscribe to our Newsletter
johnsmith@example.com

Recent News

Credit card numbers continue to slip after RBI’s deactivation order

PayU’s LazyPay, Kissht blocked after IT Ministry’s order

February 8, 2023
Leading NBFCs offer up to 8.84% to attract retail savings

NBFC-MFIs dominate microfinance market, says new report

February 8, 2023
Banks’ exposure to Adani group ‘insufficient’, face limited risk: Fitch

Banks’ exposure to Adani group ‘insufficient’, face limited risk: Fitch

February 8, 2023
Moody’s says bank exposure to Adani not large to affect credit quality

Moody’s says bank exposure to Adani not large to affect credit quality

February 8, 2023
B2B Infomedia

Be To Be Infomedia Pvt. Ltd. represents the inovative platfrom to the clients and widely recognised as one of the ponier networking platfrom with the team of young, creative, dynamic & dedicated professionals.

Quick Links

  • Home
  • About Us
  • Contact Us
  • Privacy Policy
  • Refund Policy
  • Terms and Conditions

All News

  • BFSI
  • Edtech
  • Education
  • Enterprise
  • Financial Inclusion
  • Fintech
  • Pharma
  • Startup
  • Technology
Subscribe to our Newsletter
johnsmith@example.com
  • About Us
  • Contact Us

© 2022 b2binfomedia - Designed & Maintain by hscreativehub.com.

No Result
View All Result
  • Home
  • About Us
  • Upcoming Events
  • Fintech
  • BFSI
  • Education
  • Technology
  • Startup
  • Enterprise
  • Pharma
  • Contact Us
  • Login
  • Sign Up

© 2022 b2binfomedia - Designed & Maintain by hscreativehub.com.

Welcome Back!

Sign In with Google
OR

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Sign Up with Google
OR

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In