The banking regulator, Reserve Bank of India, has approved the proposals by seven foreign banks seeking permission of the regulator to open branches in the country. The banks will reportedly set up their businesses by the mid this August this year.
The banks which have been given the nod for opening branches include Standard Chartered, Morgan Stanley Bank International, State Bank of Mauritius, Westpac Banking Corporation, Societe Generale, NP Paribas and Bank of Bahrain and Kuwait.
For the last two years foreign banks have been seeking RBI's permission to open their branches in the country. In the year 2010 six banks approached the regulator with their proposals. The year after that, in 2011 about 10 foreign banks sought RBI's permission to set up their branches in India.
Informing the Lok Sabha about this, FM P. Chidambaram said that as per WTO agreement, India can allow foreign banks to set up 12 branches in the country, in one year. He added, "RBI may, however, go beyond the WTO commitments of 12 branch licenses, if the foreign banks open offices in unbanked under-banked areas."
It is to be noted that State Bank of Mauritius and Standard Chartered Bank have been allowed to establish their branches in under banked areas. Whereas, banks like BNP Paribas, Morgan Stanley and Westpac Banking Corporation have been allowed to set up branches in Mumbai. Bank of Bahrain and Kuwati and Societe Generale are to open branches in Aluva and Sanand respectively.