RBI deputy governor R Gandhi said on Tuesday that four foreign banks have applied for setting up wholly owned subsidiaries in India.
“Several discussions are going on. I think four have already applied. We are processing the applications,” said Gandhi. The deputy governor was speaking on the sidelines of the banking event organised by FICCI and IBA.
RBI had launched a scheme for setting up wholly owned subsidiaries by foreign banks in India after considering that such a step ensures a clear delineation between the assets and liabilities of the domestic bank and those of its foreign parent and clearly provides for ring fenced capital and assets within the host country.
Development Bank of Singapore (DBS) has reportedly applied to RBI for setting up wholly owned subsidiaries.
Gandhi also said the RBI will declare systemically important banks by the end of this month. “By August end, we will declare that,” he said.
After completing the differentiated bank licensing, RBI had said its target would be to bring regulation of on-tap licensing. “For on-tap licensing, there is no closing date. At their convenience they can come to us. After the differentiated bank licensing is over, the next target is to bring in the regulation for on-tap licensing,” Gandhi said.
He said that with the payments banks, one may see the universal banks shedding-off costly payment infrastructure that includes high cost physical locations and ride on the common technology base, low-cost payments infrastructure assured by the payments banks. So far, RBI has granted in-principle approvals to 11 entities/people for setting up payments banks in India and is set to bring out the in-principle approvals for small finance banks in a short time.