RBI to monitor banks' global books for SBI, ICICI, BoB among banks to face

State Bank of India, ICICI Bank and Bank of Barodaare among the prominent banks that will face the RBI inspection as some banks have as high as a fifth of their total assets beyond the shores, said two people who are familiar with the central bank briefing. This will be effective next fiscal. 

"RBI conveyed the message that banks should be prepared for an RBI inspection henceforth for foreign offices,'' said an executive who attended the meeting but declined to be named. "The point made by the regulator was that as the size of overseas operations is rising, it needs to be directly monitored by the central bank officials." 




Indian banks in the past few years have expanded their global operations substantially, chasing the diaspora and companies that acquired overseas assets such as Tata Steel's acquisition of Corus Group. 

While nothing so far has come up in terms of weakening the domestic operations of banks, development such as the European sovereign crisis could lead to stress if their overseas subsidiaries own bonds of troubled sovereigns. 

Till now the RBI depended on banks' own declaration of the status of overseas operations. Revenues from overseas operations contribute about 5% of revenues for State Bank of India, and about 12% for Bank of Baroda, Bloomberg data shows.