The Reserve Bank of India (RBI) and Bank of England (BoE) on 1 December 2023 signed a memorandum of understanding (MoU) on cooperation and exchange of information related to Clearing Corporation of India Ltd (CCIL).
Key facts
- CCIL is a central counterparty (CCP) which provides clearing and settlement for transactions in government securities, foreign exchange and money markets in the country.
- It is regulated by the RBI.
- In October 2022, the European Union’s financial markets regulator European Securities and Markets Authority (ESMA) had announced to withdraw the recognition of six Indian CCPs, including CCIL.
- ESMA’s action came after the RBI did not allow it to supervise domestic CCPs, which were providing clearing services.
- The MoU establishes a framework for the BoE to place reliance on RBI’s regulatory and supervisory activities while safeguarding UK financial stability.
- The MoU between the RBI and the BoE confirms the interests of both the authorities in enhancing cooperation in line with their respective laws and regulations.
