Foreign Banks In India
Foreign bank in India : The total number of foreign banks in India stood at 44 in September 2020. These banks have contributed significantly to the development of the Indian banking sector.
The first foreign bank in India was the Bank of Bengal (estb. 1809), which was followed by the Bank of Bombay (estb. 1840) and the Bank of Madras (estb. 1843). These three Presidency banks were merged in 1921 to form the Imperial Bank of India. After the nationalization of the Imperial Bank of India in 1955, it was renamed the State Bank of India (SBI).
The Reserve Bank of India (RBI) was established in 1935. During the pre-independence era, the Reserve Bank of India served as the central bank for both India and Pakistan. After the partition of India in 1947, the Reserve Bank of India was divested of its Pakistan operations.
The banking sector in India was further developed with the establishment of several public sector banks, such as the Allahabad Bank (estb. 1865), the Punjab National Bank (estb. 1894), the Canara Bank (estb. 1906), the Indian Bank (estb. 1907) and the Central Bank of India (estb. 1911).
In 1969, the government nationalized 14 major commercial banks. These nationalized banks were amalgamated in 1980 to form the State Bank of India (SBI). The other nationalized banks are the Allahabad Bank, the Andhra Bank, the Bank of Baroda, the Bank of India, the Bank of Maharashtra, the Central Bank of India, the Corporation Bank, the Dena Bank, the Indian Overseas Bank, the Oriental Bank of Commerce, the Punjab National Bank, the Syndicate Bank and the United Bank of India.
The government further strengthened the banking sector in India by establishing regional Rural Banks (RRBs) in 1975. The RRBs are financed and sponsored by the concerned public sector banks.
The foreign banks operating in India are subject to the regulations of the Reserve Bank of India. These banks are also required to follow the guidelines issued by the Ministry of Finance.
The foreign banks in India are categorized into two groups, namely, the Authorized Dealer (AD) banks and the Non-AD banks. The AD banks are those banks which are authorised by the RBI to deal in foreign exchange. The Non-AD banks are not authorised to deal in foreign exchange.
The foreign banks in India have been playing a significant role in the development of the Indian banking sector. These banks have introduced several new products and services which have helped in the modernisation of the banking sector in India. The foreign banks have also helped in the development of the infrastructural facilities in the banking sector in India.
10 important topics to study in “Foreign Banks in India”.
1. Entry of foreign banks in India
2. Pre and post crisis scenario of foreign banks in India
3. Policy and regulatory framework for foreign banks in India
4. Financial performance of foreign banks in India
5. Risk management practices of foreign banks in India
6. Corporate governance practices of foreign banks in India
7. Technology adoption by foreign banks in India
8. Branch expansion strategy of foreign banks in India
9. Impact of demonetization on foreign banks in India
10. Sustainability practices of foreign banks in India.
