Impact of Foreign Banks on the Indian Economy

27 Pages Posted: 25 Mar 2014

See all articles by Shardha Gaurav

Shardha Gaurav

Indian Institute of Management (IIMB), Bangalore

Namratha Swamy

Indian Institute of Management (IIMB), Bangalore

Charan Singh

Indian Institute of Management (IIMB), Bangalore

Date Written: February 25, 2014

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

Suggested Citation

Gaurav, Shardha and Swamy, Namratha and Singh, Charan, Impact of Foreign Banks on the Indian Economy (February 25, 2014). IIM Bangalore Research Paper No. 251, Available at SSRN: https://ssrn.com/abstract=2414287 or http://dx.doi.org/10.2139/ssrn.2414287

Shardha Gaurav

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Namratha Swamy

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Charan Singh (Contact Author)

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India
080-26993818 (Phone)

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