The changing turf for foreign banks amid selective opening, scrutiny

The move is towards opening up the sector, but selectively, with regulatory scrutiny and special approval

In September 2006, the Union government had put the Satara (Maharashtra)-based United Western Bank under a moratorium on the Reserve Bank of India’s (RBI’s) advice. There were many suitors for the old private bank, including two large foreign banks operating in India, but it was IDBI Bank Ltd that came out a winner. 

The scene is very different now. The turf on which foreign banks play in India is changing fast, as is the approach of foreign investors towards Indian banks. And, of course, the lens through which the banking regulator looks at them, too, is changing. 

Before we delve