Foreign Banks in India

Foreign banks are financial institutions that establish their branch offices in a country other than their registered home country. Their registered office is located only in one country. These international financial institutions establish their branches in foreign nations to take market share in the financial market. Establishing banks in foreign countries is also part of general diplomatic relations, which signifies healthy relations with the allies. The purpose of establishing branches in foreign nations is also to provide multinational clients with enhanced convenience and services. Many of the time, foreign banks also work in collaboration with the MNCs of their native country. Foreign banks usually invest in low-tax countries. However, the constitution of foreign banks is done according to the applicable legal requirements of the foreign country. American Express, Bank of America, Citibank, Barclays, Deutsche Bank, HSBC, etc. are among the major foreign banks established in India to facilitate international banking.

Banking in India : Functions, Types, Regulation & Importance

Banking is the network of financial institutions, including different groups of commercial banks, credit unions, and other financial services firms. The banking sector is an important part of nation-building and also requires proper frameworks and regulations to ensure the stability of the national economy. Banking is the backbone for personal and commercial financial activity, as it helps fuel spending, investment, business operations, and economic growth. Banking innovations, like online and mobile banking, and now UPI have helped not only the urban population but also the suburban and rural populations. Banking has connected the rural sector with the national market and has spread financial literacy among the rural and suburban areas as well. The most important purpose of banking is to facilitate the cash flow in the economy and integrate businesses with stakeholders. The banking sector has its offerings to cater to individuals, firms, and governments.

Geeky Takeaways

  • Banking is one of the fundamental parts of personal and commercial financial activities, driving economic functions.
  • Banking has helped in the management of finances for individuals, organizations, and governments.
  • The most important purpose of a banking system is to facilitate the smooth flow of cash within the economy.
  • Apart from basic functions like accepting deposits and issuing loans, banking has a role in integrating a nation with the global financial system.

Table of Content

  • Functions of Bank
  • Types of Banks in India
  • Types of Bank Accounts in India
  • How are Indian Banks Regulated?
  • Importance of Banking
  • List of Top Indian Banks
  • Foreign Banks in India
  • List of Top Foreign Banks in India
  • Frequently Asked Questions (FAQs)

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Functions of Bank

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Types of Banks in India

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Types of Bank Accounts in India

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How are Indian Banks Regulated?

The Banking Regulation Act of 1949 regulates and oversees the banks that have been working in India. India’s Banking Regulation Act, of 1949, has established laws regarding the working and legal requirements relating to banking companies in India. Banking Regulation Act, of 1949 is in charge of regulating and managing the operations of all banking corporations in India while also ensuring that all banking activities are done within the applicable regulatory and reporting framework established by the act. In addition to this act, the Reserve Bank of India is the governing body that regulates and supervises the banks as entrusted by the Finance Ministry. Section 56 gave the Reserve Bank of India the authority to regulate its operations in the same way other banks in the country are functioning. This Act also gives the RBI the authority to provide licenses to banks, regulate shareholder voting and shareholding, oversee board and management appointments, and set the required auditing instructions for banking companies. The RBI is also entrusted with the duty to get involved in mergers and liquidations of banks....

Importance of Banking

1. Financial Inclusion: Banking in any country is very important as it helps in the financial inclusion of not only the urban population but also the rural and semi-urban population. Banking gives access to a variety of banking services and connects the population to the mainstream banking chain. This ensures that every citizen, irrespective of their financial group, can get access to basic financial frameworks like getting loans, opening savings accounts, and using payment services....

List of Top Indian Banks

Name Established Headquarter Branches Total Assets (US$ Billions) Revenue (US$ Billions) State Bank of India 1955 Mumbai, Maharashtra 22,219 $760.77 $37.15 Bank of Baroda 1908 Vadodara, Gujarat 9,693 $191.69 $8.16 Bank of Maharashtra 1935 Pune, Maharashtra 2,022 $32.92 $1.41 Bank of India 1906 Mumbai, Maharashtra 5,152 $104.01 $3.39 ICICI Bank Ltd. 1994 Mumbai, Maharashtra 5,266 $255.89 $18.11 HDFC Bank Ltd 1994 Mumbai, Maharashtra 7,860 $313.23 $14.89 YES Bank Ltd. 2004 Mumbai, Maharashtra 1,070 $44.05 $1.54 Axis Bank Ltd. 1993 Mumbai, Maharashtra 4,594 $165.40 $8.58 Kotak Mahindra Bank 2003 Mumbai, Maharashtra 1,604 $81.65 $7.56 IDBI Bank 1964 Mumbai, Maharashtra 1,937 $40.37 $2.12...

Foreign Banks in India

Foreign banks are financial institutions that establish their branch offices in a country other than their registered home country. Their registered office is located only in one country. These international financial institutions establish their branches in foreign nations to take market share in the financial market. Establishing banks in foreign countries is also part of general diplomatic relations, which signifies healthy relations with the allies. The purpose of establishing branches in foreign nations is also to provide multinational clients with enhanced convenience and services. Many of the time, foreign banks also work in collaboration with the MNCs of their native country. Foreign banks usually invest in low-tax countries. However, the constitution of foreign banks is done according to the applicable legal requirements of the foreign country. American Express, Bank of America, Citibank, Barclays, Deutsche Bank, HSBC, etc. are among the major foreign banks established in India to facilitate international banking....

List of Top Foreign Banks in India

Name Established Main Headquarters Indian Headquarters Total Assets (₹) Citi Bank 1902 New York, USA Mumbai, Maharashtra ₹2.2 lakh crore HSBC India Limited 1983 London, UK Mumbai, Maharashtra ₹2.4 lakh crore The Deutsche Bank 1980 Frankfurt, Germany Mumbai, Maharashtra ₹784,240.018 mn Barclays Bank 1990 London, United Kingdom Mumbai, Maharashtra ₹8,300 crore Bank of America 1964 Charlotte, North Carolina, United States Mumbai, Maharashtra ₹380,988.414 mn...

Frequently Asked Questions (FAQs)

What is interest and how does it work?...