In our earlier article ‘Register with SEBI as RIA to sell third party products, RBI tells banks’, Cafemutual had misinterpreted the latest RBI guidelines on investment advisors for banks.
The article had stated that RBI has mandated banks to register with SEBI under Registered Investment Advisor (RIA) norms to distribute third party products. However, it has been pointed out to us that RBI has mandated only those banks who are already registered with SEBI as RIA to segregate their investment advisory arm and other departments of the banks.
Simply put, banks cannot offer investment advisory services at their existing branch offices; instead, they have to open a separate office to offer wealth management services.
Currently, only six banks – HDFC, ICICI Prudential, Kotak Mahindra, The Royal Bank of Scotland, HSBC and Standard Chartered bank are registered with SEBI as RIAs. These banks provide investment advisory services at their respective branches.
The banking regulator has given three year time to these banks to comply with the guidelines.
We regret the inconvenience caused to our readers.
