New
Delhi: The Government has announced that foreign banks
can set up 100 per cent subsidiaries in India.
It
has also allowed take overs by foreign banks by permitting
acquisition of up to 74 per cent stake in existing private
bank to set up a subsidiary.
The
foreign banks have to however, choose only one among the
three alternatives of having a branch network or a wholly-owned
subsidiary or a private banking subsidiary with aggregate
foreign holding of up to 74 per cent.
Thus,
a foreign bank will be allowed to establish a wholly-owned
subsidiary either through conversion of its existing branches
or through as fresh banking licence.
Only
foreign banks regulated by a banking supervisory authority
in their home country would be allowed to adopt the 100
per cent subsidiary route.
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