It arrived in India in 1902, and in 1985 it began operating in the consumer banking sector. The second-largest bank in South Africa with $118 billion in assets in India, FirstRand Bank, followed Citigroup’s lead almost immediately after it made its announcement last year.
For a variety of reasons, big international banks like ANZ Grindlays, RBS, and Commonwealth Bank of Australia have scaled back their operations in India. Foreign banks have been having difficulties due to, among other things, challenges with low asset quality, variances in compliance rules, and greater rivalry from domestic firms.
Source: Outlook India
In a recent report, Grant ThorntonThe level of compliance demands between international banks and Indian banks, particularly around areas of priority sector lending and taxation, have always been a contentious topic, according to a write-up on the subject on the website.
Source: The Hindu Business Line
In order to be regarded equally with Indian banks, the Reserve Bank of India (RBI) in 2013 required foreign banks to operate through branch presence or establish wholly-owned subsidiaries. Only a few banks received licenses to open new branches, despite the fact that several banks’ business models did not permit the subsidiary option.
Although the concept of a wholly-owned subsidiary was made with the intention of addressing this imbalance, Grant Thornton noted that few people adopted it because the rupee was still not entirely convertible. British banking giant Barclays reduced its India business in 2012.
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