Foreign banks in India: At least 14 foreign banks are likely to open branches across India. Four banks from South Korea, three from Iran, two each from China and the Netherlands have applied for setting up branches and wholly-owned subsidiaries in the country.
Foreign banks in India: At least 14 foreign banks are likely to open branches across India. Four banks from South Korea, three from Iran, two each from China and the Netherlands have applied for setting up branches and wholly-owned subsidiaries in the country. One bank each from the Czech Republic, Sri Lanka and Malaysia have applied for opening branches in India. The RBI, government sources said, is currently examining these applications. This comes after last year’s sharp reduction in branches of foreign banks. The number of foreign bank branches across the country fell to 288 in 2016-17 from 317 in 2015-16, according to Indian Express report. It has been learnt that this year could see significant increase in opening of foreign bank branches.
Two banks from Iran, Bank Pasargad and Parsian Bank, have applied for setting up their maiden branch in India, while another Iranian lender, Saman Bank, has sent an application for setting up a representative office. India imports a large quantity of oil from Iran and has committed investment of $500 million for the development of the crucial Chabahar port.
Among the Chinese lenders, the Industrial and Commercial Bank of China (ICBC) has applied for opening its second branch in New Delhi, while Bank of China has applied for approval for its first branch in the country, official sources said. Apart from Iran and China, four South Korean banks are seeking to step up their presence in India. While Kookmin Bank and Nonghyup Bank of South Korea have each applied for opening their first branch in India, KEB Hana Bank has sought permission for opening its second branch.
Another South Korean lender, Woori Bank, which had two branches at March-end 2017, sought the central bank’s permission for setting up a a Wholly Owned Subsidiary (WOS) in India by converting its existing branches into a WOS. The RBI has been encouraging foreign banks to enter India by setting by a WOS as these can be better regulated.
Among the other foreign banks, Sri Lanka’s Bank of Ceylon and Netherlands’ Cooperative Rabobank UA have sought permission for opening their second branch in India. PPF Banka of Czech Republic has sought permission for setting up a WOS in India, while Netherlands’ ING Bank has applied for setting up a representative office in India. Malaysia’s Maybank has applied for reconsideration of the government’s decision to reject its application for a maiden branch in India, the sources said.
At March-end 2017, there were a total of 49 foreign banks operating 288 branches in country, led by Standard Chartered Bank with 100 branches, Citibank with 40 branches, Hong Kong and Shanghai Banking Corpn. Ltd 26 branches and Deutsche Bank AG 17 branches, RBI data showed. In 2016-17, foreign banks significantly reduced their India operations. “The presence of foreign banks in India declined in terms of number of branches and employees during 2016-17; the number of overseas branches of Indian banks, on the other hand, increased but there was marginal reduction in their employee strength,” the RBI said in its latest Survey on International Trade in Banking Services: 2016-17.
Earlier, around three to four foreign banks are likely to soon set up shop at International Financial Services Centre (IFSC) in Gujarats GIFT city and are waiting for the RBI to issue certain operating guidelines. Currently, 11 domestic lenders including SBI, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Bank of Baroda have opened their businesses at GIFT (Gujarat International Finance Tec-City). The financial transactions by these banks has crossed USD 8 billion. “About three to four foreign banks are in cusp of setting up offices at GIFT city. RBI has to issue a final set of operating guidelines for them,” GIFT city managing director and group CEO Ajay Pandey had said.