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India becomes favored destination for foreign banks

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India becomes favored destination for foreign banks

A whopping 14 foreign banks have reportedly applied for setting up their branches in India. These foreign lenders have already submitted their applications to the RBI (Reserve Bank of India). According to reports, the tally includes 2 banks from China and 4 from South Korea in tandem with 2 from the Netherlands. These banks are applying for establishing new branches in the country along with subsidiaries. There is a bank each from Sri Lanka, the Czech Republic and Malaysia applying for new branches in India as well. The RBI, as per reports, is presently going through the applications.

Experts expect several new branches of foreign banks to be established this year in India. The foreign bank branch tally went down to 288 for 2016-17 in comparison to 317 in 2015-16 as per information released by the RBI. Parsian Bank and Bank Pasargad, both from Iran, have applied for setting up branches in India for the very first time. Saman Bank, another Iran based bank, has applied for establishing its representative office. Iran supplies a major chunk of oil imports to India and our country has already committed $500 million for developing the Chabahar port as well.

Iran is now attempting to revive payment channels via India. The ICBC (Industrial and Commercial Bank of China) has submitted an application for setting up its second banking branch in the Capital and Bank of China is hoping to open its first ever branch in India. Kookmin Bank and Nonghyup Bank from South Korea have both applied for establishing their first ever Indian branches. KEB Hana Bank has also sought application for setting up its second Indian branch. Woori Bank from South Korea already has two Indian branches and has asked for the RBI’s nod for establishing a wholly owned subsidiary through transforming its branches into the same.

Several foreign banks are now hoping to commence full-fledged operations in India backed by hopes for a resurgent economy and other positive developments. Bank of Ceylon from Sri Lanka and Cooperative Rabobank UA from the Netherlands have also sought permission to open their second branches in the country. PPF Banka from Czech Republic also seeks to set up a wholly owned subsidiary or WOS while the ING Bank from Netherlands wishes to set up its representative office here. Maybank from Malaysia has appealed to the Government to review its previous decision to reject its application for opening its first ever Indian branch.

By the end of March, 2017, there were approximately 49 foreign banks that were running a total of 288 branches in India. Citibank and Standard Chartered Bank lead the pack with 40 and 100 branches respectively followed by Honda Kong and Shanghai Banking Corporation Limited which has 26 branches and Deutsche Bank AG which has 17 branches.

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