Indian Families Launch Foreign Offices Amid RBI Ambiguity
By Business Desk
Indian business families are establishing overseas family offices, navigating RBI policy ambiguity with support from banks and wealth managers.
Indian promoter and business families are increasingly establishing family offices in Singapore and other international locations. This trend is actively supported by private banks, law firms, and wealth managers, despite unfolding within a significant regulatory grey area.
Institutions are currently navigating an unwritten ban and differing interpretations of Reserve Bank of India (RBI) guidelines regarding these cross-border fund transfers. This has led to a cautious yet active revival of such overseas investments.
Understanding the Regulatory Landscape
The finance ministry’s regulations, issued in August 2022, explicitly permit Indian non-financial entities to undertake Overseas Direct Investments (ODI). These investments can be directed towards foreign financial services entities, providing a framework for such transfers.
However, an informal caution from an RBI official in 2023 had previously led to a halt in these remittances. The central bank’s subsequent silence on the matter has prompted some banks to adopt a literal interpretation of the existing rules, selectively clearing these transfers.
Current Activity and Expert Calls
An estimated ₹1,500 crore has been remitted for these purposes over the last two months, indicating a notable resurgence in activity. A prominent Singaporean bank has been actively advising Indian families on establishing these international offices.
Experts are now urgently calling for clearer regulatory guidance from both the government and the Reserve Bank of India. This clarity is crucial to address the existing ambiguity and mitigate potential economic and regulatory implications, especially considering the paused Family Investment Fund (FIF) route in GIFT City.