The Reserve Bank of India (RBI) and the finance ministry have not resolved the issue of the status of the seven private sector banks categorized as foreign-owned under the new Foreign Direct Investment (FDI) norms, said Reserve Bank of India (RBI) Governor D Subbarao.
At a press conference in Mumbai on Tuesday, Subbarao said “We are in correspondence with the Government of India on this matter. The issue has not been resolved yet.”
Earlier in the year, RBI had pointed out to the finance ministry that the new FDI guidelines will create a new category of “foreign-owned and Indian-controlled banks”, which could pose regulatory challenges.
RBI, in its observations on the FDI policy, had also stated that the new FDI norms could lead to “de-facto” capital account convertibility, which is restricted at the moment.
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