The Chief Executives,
All Banks / DFIs.


Dear Sirs / Madam,

ESTABLISHMENT OF SUBSIDIARIES BY BANKS / DFIs

Please refer to the instructions issued vide BPD Circular No. 7 dated March 8, 2004 regarding the establishment of subsidiaries by Banks / DFIs.

Some of the banks / DFIs which had already established subsidiaries have approached us, requesting for grant of some time for regularization of the position in accordance with the instructions contained in the aforesaid Circular. The matter has been considered and it has been decided to give banks / DFIs a regularization period upto December 31, 2004 for all those subsidiaries which were established before the issuance of BPD Circular No. 7 dated March 8, 2004. From January 1, 2005, the banks / DFIs shall ensure full compliance with the instructions given in the said Circular with regards to these subsidiaries.

Please acknowledge receipt.