The Reserve Bank of India has issued amendment guidelines to its 2025 framework on setting up wholly owned subsidiaries by foreign banks, revising the dividend provision for those entities. Under the amended rule, a wholly owned subsidiary of a foreign bank incorporated in India may declare dividends like domestic banks, subject to the criteria in the Reserve Bank of India Directions on prudential norms for declaration of dividends and remittance of profit, 2026. The change amends paragraph 13 of the 2025 Guidelines on declaration of dividends. Dividends may be repatriated in accordance with the Foreign Exchange Management Act, 1999. The amendments follow a review after issuance of the 2026 dividend and profit remittance directions and will take effect from financial year 2026-27.
Reserve Bank of India 2026-03-10
Reserve Bank of India updates foreign bank wholly owned subsidiary dividend rules from FY 2026-27
The Reserve Bank of India has amended its 2025 framework for wholly owned subsidiaries of foreign banks, aligning their dividend declaration rules with those of domestic banks. The amendments, effective from the financial year 2026-27, are subject to the Reserve Bank of India Directions on prudential norms and the Foreign Exchange Management Act, 1999.