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India central bank relaxes rules for foreign-owned banking units

India's central bank has relaxed rules on setting up banking units within an international financial services center, or IFSC, by international banks.

The Reserve Bank of India said May 17 that the parent bank has to provide and maintain a minimum capital of US$20 million for the banking unit at all times.

Previous rules had required regulatory capital to be borne at the banking unit level, rather than at the parent bank level.

The RBI added that the parent bank would be required to provide a "letter of comfort" specifying it would provide financial assistance, when required, in the form of capital support to the banking unit.

The Indian central bank launched the IFSC scheme in April 2015.