Banks should move wealth management services to subsidiary: RBI panel
MUMBAI (Reuters) - Indian banks should split wealth management and investment advisory services to avoid conflict of interest as well as address mis-selling of financial products, by creating a subsidiary, a draft report by a Reserve Bank of India (RBI) panel said.
The banks will need to get the RBI's approval to create subsidiaries, which would be then registered with the Securities and Exchange Board of India (SEBI), the panel proposed on Friday.
"To address the issue of conflict of interest arising from the single entity conducting both the activities of advisory/fund management as well as marketing, it is proposed to segregate the two functions," the report said, adding the bank should have an 'arm's length' relationship with its subsidiary.
The report also proposed the RBI should continue to supervise the bank's activities done through the subsidiary.
Last month, the RBI said it would issue draft guidelines to address mis-selling of financial products and structure of transactions to aid tax evasion and fradulent transfer of funds.
(Reporting by Neha Dasgupta; editing by Ron Askew)
- Tweet this
- Share this
- Digg this
- Maker of U.S. highway guardrails stops shipments over safety concerns
- Google's Pichai to oversee major products and services
- São Paulo running out of water as rain-making Amazon vanishes
- UPDATE 1-UK's Labour suffers setback as leader in Scotland quits
- India picks Israel's Spike anti-tank missile over U.S. Javelin - source
Finance Minister Arun Jaitley favours a cut in interest rates to trigger demand in the construction sector, a newspaper report said on Saturday, but the Reserve Bank of India (RBI) has signalled it will not ease policy until it is confident of lower inflation. Full Article
Euro zone risks "relapse into recession" without structural reforms - Draghi. Full Article
Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw” Full Article