“That is going to be a big opening because — one could even contemplate
taking over Indian banks, small Indian banks and so on,” he told a
Washington audience on Saturday.
The policy framework for the entry of foreign banks in India, Mr. Rajan added, would be unveiled in the next few weeks.
The banking sector reforms, in particular to those facilitating entry of
foreign banks in India in a “big way” is part of the five pillars of
reforms, including monetary policy framework, which the RBI is going to
implement in the next few years, the RBI Governor said.
“For foreign banks, if you adopt a wholly-owned subsidiaries structure
and we are coming up with details on that in the next couple of weeks,
we will allow you near national treatment,” he said, quickly adding that
there would be two conditions.
“One reciprocity — your country should allow the same to our own banks —
and second you come through one route either you have a branch or you
have a subsidiary; don’t do both.
That is primarily to simplify our regulatory function, but also to make
it clean. But once you have a fully owned subsidiary, we would allow you
a lot of freedom,” he said.
Acknowledging that price situation was an issue for the economy, Mr.
Rajan said the ordinary monetary policy would be focused on containing
inflation and not directed towards external sectors.
The RBI is scheduled to present the quarterly review of the monetary policy on October 29.
by the Hindu
Washington,
October 13, 2013
Updated: October 13, 2013 16:17 IST
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