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Impact of Foreign Banks on the Indian Economy

Gaurav Sharda, Namratha Swamy and Charan Singh
2014
Working Paper No
451
Body

This paper examines the impact of foreign banks on Indian economy. Further, it discusses the various opinions towards the foreign bank operations in the host country, with India as the example. The paper looks at the regulatory framework in India to understand the attitude of RBI towards foreign banks. It also discusses what several foreign banks feel about the Indian regulatory setup and how these banks have adapted themselves to deal with the changes. To look at the impact of foreign banks the paper analyses various parameters like the rural presence, contribution towards priority sector, technological development and financial ratios like return on asset and equity.  Two case studies have been discussed - one, about The Hong Kong and Shanghai Banking Corporation's (HSBC) journey in India and the other, about BCCI in India. The paper ends by discussing various challenges which are faced by foreign banks when they set-up their shop in the country.

Key words
Foreign Banks, priority sector lending, HSBC, BCCI
WP_No._451.pdf (436.2 KB)

Impact of Foreign Banks on the Indian Economy

Author(s) Name: Gaurav Sharda, Namratha Swamy and Charan Singh, 2014
Working Paper No : 451
Abstract:

This paper examines the impact of foreign banks on Indian economy. Further, it discusses the various opinions towards the foreign bank operations in the host country, with India as the example. The paper looks at the regulatory framework in India to understand the attitude of RBI towards foreign banks. It also discusses what several foreign banks feel about the Indian regulatory setup and how these banks have adapted themselves to deal with the changes. To look at the impact of foreign banks the paper analyses various parameters like the rural presence, contribution towards priority sector, technological development and financial ratios like return on asset and equity.  Two case studies have been discussed - one, about The Hong Kong and Shanghai Banking Corporation's (HSBC) journey in India and the other, about BCCI in India. The paper ends by discussing various challenges which are faced by foreign banks when they set-up their shop in the country.

Keywords: Foreign Banks, priority sector lending, HSBC, BCCI
WP_No._451.pdf (436.2 KB)