Indian banks facing restrictions in US
FM says India would raise with the US authorities the need to give Indian banks more licences to open branches.india Updated: Aug 01, 2006 15:30 IST
Indian banks are facing restrictions in opening new branches in the United States, Finance Minister P Chidambaram told the Rajya Sabha on Tuesday.
"US Federal Reserve follows a rather restrictive policy in granting foreign banks permission for opening branches... we have taken up the matter with the US" at different forums, he said replying to supplementaries during the Question Hour.
He said New Delhi would continue to raise with the US authorities the need to give Indian banks more licences to open branches in that country.
"Indian banks have branches in US but want to open more," he said.
Asked if India would follow the same principles when giving permission to US banks to open branches in India, Chidambaram said, "Reciprocity will be a consideration in dealing with this matter."
The Finance Minister said different countries have different regulations for allowing foreign banks to do banking business. These range from restricting the form of presence to discrimination in matter of capital adequacy and restrictions on dealings in foreign exchange.
"These are matters we are capable and confident of deal with," he said.
He said Indian banks must open branches abroad to increase trade and investment and serve Indians living abroad.
Reserve Bank of India (RBI) after taking into consideration a bank's capital base, capital adequacy ratio, market reach and human resource availability grants licences to Indian banks to open branches abroad.