USIBC asked the RBI to define exactly what “near-national treatment” of foreign banks in India will mean. It has also sought clarifications from the RBI on certain provisions which present lingering questions for the industry, including the credit rating of the Indian subsidiary or global parent. It also raised questions related to new branch licensing implications if India enters into a Comprehensive Economic Co-operation Agreement (CECA) with a foreign bank’s host country.
Welcoming the RBI guidelines, Somers said these rules are certainly a valuable step in the right direction. “Global banks in India are the key to leveraging the global capital and expertise required to finance India’s trillion-dollar infrastructure challenge as well as social development,” Somers said. “USIBC has been engaged in a dynamic dialogue with both public and private sector on the future of foreign banking in India since the original RBI discussion paper on this topic was released,” USIBC Director of Financial Policy Melissa Frakman said. “Our membership very much welcomes the flexibility provided by the final guidelines. With this certainty, banks are now able to plan their next century supporting India’s economic growth,” Frakman added. (PTI)