Three South Korean banks ?Shinhan Bank, Woori Bank and the Industrial Bank of Korea ? are likely to get RBI’s approval for opening a total of five new branches in India. This follows a favourable view taken by the Modi government with regard to these Korean banks’ plans to establish presence in India.

Official sources told FE that these banks could be the first batch of foreign lenders to get the green signal for expansion of operations in the country, but added that plans of Japan?s Mizuho Corporate Bank, France?s Societe Generale and Spain?s Banco Santander in India have been put on hold by the government.

In March, the UPA had given the last of its approvals to foreign banks by allowing Australia and New Zealand Banking Group (ANZ) to open two more branches, a move which was recently endorsed by the RBI.

In the case of foreign banks, the RBI forwards their applications to an inter-departmental committee consisting of officials from the ministries of finance, home, commerce and external affairs. The banking regulator then takes a final decision on the basis of the panel?s recommendations.

The panel, on June 6, gave its nod to Shinhan Bank?s application to open three more branches, as well as to Woori Bank and Industrial Bank of Korea to start one more branch each, the sources said.

RBI data as on September 30, 2013 shows that from South Korea, Shinhan Bank has three branches in India and Woori Bank has one, while Hana Bank, Korea Exchange Bank, Kookmin Bank and Industrial Bank of Korea have a representative office each in India.

However, the sources said, the committee “deferred” Banco Santander?s proposal to open a representative office in India and Societe Generale?s application to expand its operations in the country as it wanted more information regarding the operations of these banks.

Societe Generale currently has three branches in India (Delhi, Mumbai and Sanand in Gujarat). The bank had recently said that once it gets the regulatory approval for opening two more branches in Bangalore and Chennai, it will then expand to Hyderabad and Pune as well.

The panel also deferred Mizuho Corporate Bank?s application to open two more branches in the country. The bank, as per its website, already has four branches in India. In this case, the sources said New Delhi wants Tokyo to show reciprocity by allowing more Indian banks to expand operations in Japan.

In addition to the branches of Mizuho, the Bank of Tokyo- Mitsubishi UFJ has four, while Sumitomo Mitsui Banking Corporation has one branch, taking the total Japanese bank branches in India to nine. However, as on September-end 2013, Indian banks only have four branches in Japan with State Bank of India and Bank of India having two branches each there.

The RBI needs to allow only 12 foreign bank branches annually as per India’s commitment at the World Trade Organisation, but the central bank has been permitting the opening of around 18.