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Introduction
Introduction
Foreign banks are those banks whose branch offices are in India but they are incorporated
outside India, and have their head office in a foreign country. These banks were allowed to
set up their subsidiaries in India from the year 2002. They have to operate their business by
following all the rules and regulations laid down by the RBI - Reserve Bank of India. They
have to pay more attention to the priority sector by giving them a special place in bank
lending. These banks are expected to follow all the banking regulations, just like any other
domestic banks. The foreign banks can operate in India only, if they have a sound financial
status. They must have a minimum of 25 million US dollars in minimum 3 branches. The first
branch and the second branch must have 10 million US dollars each. The third branch
should have a minimum of 5 million US dollars. The foreign banks are permitted to open up
more branches in the country, if the performance of the bank is more than satisfactory and it
matches the criteria laid adopted by the domestic banks.
Foreign banks who wish to open up branches in India have to apply to the RBI. These banks
should be able to satisfy the RBI regulations. The banks should also get permission from
their home country to set up branches in India. Other factors that are considered while
approving the application of setting up the presence of foreign banks in India are as follows:
Foreign banks have played an important role in the Indian economy, especially in the priority
sectors. Globalization has compelled the banking sector to reach out to more customers in
order to expand their business. This meant opening banking businesses even in the foreign
countries. Many of the private banks were interested in expanding their business all over the
world. They opened up branches across the globe to serve large number of customers, and
also improve service to the existing customers. This change was a blessing for India.
Currently, the foreign banks are growing tremendously in India.
The services provided by these banks are very impressive. The presence of these banks in
India brought a lot of technical development. Banks of all categories, be it a domestic bank
or an international bank, started using the latest technologies to provide better service to
the customers. The technological development saved a lot time of the customers as well as
the bankers. They introduced innovative and unique banking practices in India. The previous
years witnessed cut throat competition in the banking sector with the presence of foreign
banks. The competition has compelled banks to come up with something new that no other
bank can provide to the customers. Banks are partially a part of the service industry. The
main objective of all the banks was to provide a better service to a large number of
customers and look after their financial requirements. Customer satisfaction was a priority
for domestic banks as well as the foreign banks.
Number of Banks
Number of Branches
32
94
Maharashtra
1800000
1600000
1400000
1200000
1000000
Offices
Deposits
800000
Credits
600000
400000
200000
0
Dec,2011
March,2012
September,2013
Total @
Offices
Deposits
Credit
Offices
Deposits
Credit
83
137770
95885
87
137783
95890
-76
-137666
-95736
287
258935
228903
302
259197
229776
-227
-249357
-222737
Total @
Offices
Deposits
Credit
Offices
Deposits
Credit
86
1519380
982559
90
1519518
982641
-79
-1518306
-981632
291
2725626
2313403
306
2729486
2321733
-231
-2636801
-2251516
State
Maharashtra
India
Urban/Metropolitan
Office
s
Deposits
Credits
86
1678197
1127107
-80
-1677267
-1125562
296
3092944
2747085
-235
-2989865
-2684466
Deposits
1678961
Credits
1127214
317
309974
6
2759807
Semi-Urban
Offices
Deposit
Credit
Offices
Deposit
Credit
Semi-Urban
Offices
Deposit
Credit
Offices
Deposit
10044
47
Maharashtra
All India
Credit
Semi-Urban
Offices
Deposit
Credit
Offices
Deposit
Maharashtra
Credit
-
India
9881
50
Above statistic shows, the foreign banks are doing quite well in semi urban area compare to
rural area.