Introduction

Foreign banks are those banks whose branch offices are in India but they are incorporated
outside India, and have their head office in a foreign country. These banks were allowed to
set up their subsidiaries in India from the year 2002. They have to operate their business by
following all the rules and regulations laid down by the RBI - Reserve Bank of India. They
have to pay more attention to the priority sector by giving them a special place in bank
lending. These banks are expected to follow all the banking regulations, just like any other
domestic banks. The foreign banks can operate in India only, if they have a sound financial
status. They must have a minimum of 25 million US dollars in minimum 3 branches. The first
branch and the second branch must have 10 million US dollars each. The third branch
should have a minimum of 5 million US dollars. The foreign banks are permitted to open up
more branches in the country, if the performance of the bank is more than satisfactory and it
matches the criteria laid adopted by the domestic banks.
Foreign banks who wish to open up branches in India have to apply to the RBI. These banks
should be able to satisfy the RBI regulations. The banks should also get permission from
their home country to set up branches in India. Other factors that are considered while
approving the application of setting up the presence of foreign banks in India are as follows:

Financial soundness of the foreign banks

Economic and political relations between the home country of the foreign banks and
India.
International ranking of the bank
Home country ranking of the bank
International presence of the bank
Rating given to the bank by international rating agencies

Foreign banks have played an important role in the Indian economy, especially in the priority
sectors. Globalization has compelled the banking sector to reach out to more customers in
order to expand their business. This meant opening banking businesses even in the foreign
countries. Many of the private banks were interested in expanding their business all over the
world. They opened up branches across the globe to serve large number of customers, and
also improve service to the existing customers. This change was a blessing for India.
Currently, the foreign banks are growing tremendously in India.

The services provided by these banks are very impressive. The presence of these banks in
India brought a lot of technical development. Banks of all categories, be it a domestic bank
or an international bank, started using the latest technologies to provide better service to
the customers. The technological development saved a lot time of the customers as well as
the bankers. They introduced innovative and unique banking practices in India. The previous
years witnessed cut throat competition in the banking sector with the presence of foreign
banks. The competition has compelled banks to come up with something new that no other
bank can provide to the customers. Banks are partially a part of the service industry. The
main objective of all the banks was to provide a better service to a large number of
customers and look after their financial requirements. Customer satisfaction was a priority
for domestic banks as well as the foreign banks.

Number of Functioning Foreign Banks and

their Branches in Maharashtra
(As on 30.09.2011)
State

Number of Banks

Number of Branches

32

94

Maharashtra

1800000
1600000
1400000
1200000
1000000

Offices
Deposits

800000

Credits

600000
400000
200000
0
Dec,2011

March,2012

September,2013

Population Group-wise Distribution of Number of Reporting Offices,

Aggregate Deposits and Gross Bank Credit of Foreign
Banks (Quarterly) in Maharashtra
(December, 2011)
(Amount : Rs. in Crore)
Urban/Metropolitan
State
Maharashtra
India

Total @

Offices

Deposits

Credit

Offices

Deposits

Credit

83

137770

95885

87

137783

95890

-76

-137666

-95736

287

258935

228903

302

259197

229776

-227

-249357

-222737

Population Group-wise Distribution of Number of Reporting Offices,

Aggregate Deposits and Gross Bank Credit of Foreign
Banks (Quarterly) in Maharashtra
(March, 2012)
(Amount : Rs. in Million)
Urban/Metropolition
State
Maharashtra
India

Total @

Offices

Deposits

Credit

Offices

Deposits

Credit

86

1519380

982559

90

1519518

982641

-79

-1518306

-981632

291

2725626

2313403

306

2729486

2321733

-231

-2636801

-2251516

Population Group-wise Distribution of Number of Reporting Offices,

Aggregate Deposits and Gross Bank Credit of Foreign Banks (Quarterly) in
Maharashtra
(September, 2013)

State
Maharashtra

India

Urban/Metropolitan
Office
s
Deposits
Credits
86
1678197
1127107
-80
-1677267
-1125562
296

3092944

2747085

-235

-2989865

-2684466

(Amount : Rs. in Million)

Total@
Offices
90

Deposits
1678961

Credits
1127214

317

309974
6

2759807

Population Group-wise Distribution of the Number of Reporting Offices, Aggregate

Deposits and Gross Bank Credit - Foreign Banks in Maharashtra
(December 2001) - Part I
(Amt. in Rs. Lakh)
Rural
State
Maharashtra

Semi-Urban

Offices

Deposit

Credit

Offices

Deposit

Credit

Population Group-wise Distribution of the Number of Reporting Offices, Aggregate

Deposits and Gross Bank Credit of Foreign Banks in Maharashtra
(March 2002) - Part I
(Amount in Rupees Lakh)
Rural
Region/State/UTs

Semi-Urban

Offices

Deposit

Credit

Offices

Deposit

10044

47

Maharashtra
All India

Credit

Population Group-wise Distribution of Number of Reporting Offices, Aggregate

Deposits and Gross Bank Credit - Foreign Banks in Maharashtra
(June 2002) - Part I
(Amount in Rs. Lakh)
Rural
Region/States/UTs

Semi-Urban

Offices

Deposit

Credit

Offices

Deposit

Maharashtra

Credit
-

India

9881

50

Above statistic shows, the foreign banks are doing quite well in semi urban area compare to
rural area.