Reserve Bank of India (RBI) and the Bank of England have formally solidified their collaboration by signing a Memorandum of Understanding (MoU) on Friday. This milestone agreement focuses on cooperation and the exchange of crucial information pertaining to the Clearing Corporation of India Limited (CCIL).
In essence, this MoU establishes a structured framework that enables the Bank of England to rely on the regulatory and supervisory activities conducted by the RBI while ensuring the safeguarding of the United Kingdom's financial stability.
Emphasizing the significance of international cooperation in facilitating clearing activities across borders, the RBI highlighted that this MoU underscores the BoE's commitment to respecting and acknowledging the regulatory frameworks established by other authorities. It serves as a testament to the mutual interest of both entities in strengthening cooperation within the boundaries set by their respective laws and regulations.
The RBI further elaborated that this agreement will enable the Bank of England to assess CCIL's application for recognition as a third country Central Counterparty (CCP). Such recognition is a prerequisite for banks based in the UK to execute transactions through CCIL.
This significant MoU was officially signed in London by Deputy Governor T Rabi Sankar representing the RBI and Deputy Governor for Financial Stability Sarah Breeden representing the Bank of England.