Political leaders are voicing concerns about the operations of Euro Exim Bank following an RTV report. Recently, Rajya Sabha member Karti Chidambaram wrote a letter to the Reserve Bank of India (RBI), seeking clarity on whether Euro Exim Bank Ltd. is authorized to issue bank guarantees in India. The letter states that Euro Exim Bank Ltd. is regulated by the Financial Services Regulatory Authority of Saint Lucia.
Karti Chidambaram questioned the regulatory framework of Euro Exim Bank in India, given that it operates under the laws of England and Wales. He inquired whether the bank is regulated by the RBI and if it complies with the Banking Regulation Act, 1949, and other applicable regulations. He sought details on the extent of RBI’s supervision over Euro Exim Bank.
In his letter, Chidambaram highlighted the fake guarantees scandal involving Euro Exim Bank, as exposed by RTV. He requested the RBI to clarify if Euro Exim Bank is authorized to issue bank guarantees in India and whether such guarantees fall under the RBI’s regulation and supervision. Additionally, he asked if Indian commercial banks are permitted to accept bank guarantees issued by foreign entities not registered under the RBI.
There is growing anticipation regarding the RBI’s response to Chidambaram’s letter, which is expected to reveal crucial details about Euro Exim Bank’s operations and its guarantees. Chidambaram has also written to the State Bank of India (SBI), seeking an explanation on how they accepted guarantees from Euro Exim Bank.