(a) whether a number of foreign banks intend to close their operation in India;
(b) if so, the reasons therefor alongwith their names;
(c) the reasons for which the foreign banks were allowed to operate in India; and
(d) the implications of such banks`closure in the country?
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI BALASAHEB ViKHE PATH) :
(a) and (b) While two Korean banks have closed down their Indian operations, two other
banks have merged their Indian operations and some existing foreign banks have closed or
merged their branches as a part of their restructuring plans. There is no information
with Reserve Bank of India on the intention, if any, of any more foreign banks to close
their operations in India.
(C and (d) The Banking Regulation Act, 1949 empowers Reserve Bank of India to permit
entry of foreign banks. These banks are allowed to operate in India because of the
benefit derived in financing the export/import trade and to improve the economic and trade
relations between the concerned countries. The decision to close Indian operations rests
with ihe foreign banks. It is, however, ensured by the Reserve Bank of India that all
liabilities in India are fully me! before the foreign banks close down their operations
in India.