Banks must offer Wealth Management Services through subsidiary- (Reserve Bank of India) (21 Apr 2016)
MANU/RMIC/0066/2016
Banking
The Reserve Bank of India clarified that banks cannot provide Investment Advisory Services (better known as ‘Wealth Management Services’) to its customers in-house. Rather, provision of such services will have to be done through a separate subsidiary maintaining an arm’s length relationship with the holding bank.
IAS provided by bank sponsored subsidiaries will require registration with SEBI and will be governed by its extant Regulations of Investment Advisors. Despite being hived off into distinct entities, advisory services offered by banks will remain limited to products and services which the banks are permitted to deal in.
Banks imparting such services to customers are afforded three years to reorganise operations.
Tags : INVESTMENT ADVISORS BANKS SEPARATION
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