European lender ABN Amro has applied to the Reserve Bank of India to set up a wholly owned subsidiary (WoS) in India.
So far, three foreign lenders have expressed interest in taking up the subsidiary route. "Apart from DBS Bank and State Bank (Mauritius), ABN Amro has applied for WoS," RBI Deputy Governor R Gandhi said on the sidelines of an event in Mumbai. He clarified that three, and not four foreign banks as he had mentioned last month, have applied to take the WoS route so far.
RBI had said if foreign banks take up the WoS route, the lenders would be treated nearly on a par with other Indian banks and would be given capital gains tax and stamp duty benefits. Apart from this, the foreign banks would be permitted to acquire local private banks.
Though the regulator had introduced guidelines for WoS in November 2013, it was only after a year and a half that the foreign lenders expressed interest in using this option. Bigger foreign banks such as Citibank, Standard Chartered and HSBC have still not applied for converting their branches into such subsidiaries.
Earlier, RBI had said foreign banks that entered India after August 2010 would have to mandatorily convert their branches into WoS. At present there are nine such lenders that have started their operations in India after August 2010. However, RBI has not yet put up a cut-off date for the conversion.