Foreign Banks in India

Foreign Banks are banks that are incorporated in a foreign country but operate in India through branch offices or wholly-owned subsidiaries. They bring global banking practices and foreign capital, and typically cater to multinational companies, export-import businesses, and high-net-worth clients, although some also engage in retail banking in a limited way.

Modes of Operation

There are two modes of operations for foreign banks in India viz. Branch Model and WOS Model.

Branch Model

Traditionally, foreign banks have operated in India as branches of the parent bank (e.g., Citi, HSBC, Standard Chartered all started as branches of their overseas parents). A branch is not a separate legal entity; it is part of the foreign bank. These branches can conduct banking business in India but their expansion (opening new branches) is subject to RBI approval. Profits can be repatriated back to the parent.

Wholly-Owned Subsidiary (WOS) Model

Since 2013, RBI has allowed foreign banks to set up wholly-owned subsidiaries incorporated in India (which would be treated similar to Indian banks). A WOS gives the foreign bank greater freedom to expand branches (national treatment) and ring-fences Indian operations with local capital. In return, the subsidiary must meet all prudential norms like any Indian bank. DBS Bank (Singapore) was the first to convert its Indian operations into a subsidiary (DBS Bank India Ltd.).

Other big foreign banks have not yet converted and still operate as branches, largely because conversion is optional and depends on business strategy.

Presence and Examples

As of 2025, there are around 45 foreign banks operating in India. Together, they account for roughly 7% of the total banking sector assets. Their physical footprint is small – less than 1% of total bank branches, concentrated in metropolitan cities. (In 2013, 43 foreign banks had only 333 branches in India, 99% of which were in urban/metro areas – this pattern persists).

Despite limited branches, foreign banks play a vital role in specialized services. They dominate areas like foreign exchange, trade finance, corporate banking, and wealth management. For example, Citibank, HSBC, Standard Chartered, and Deutsche Bank have long-standing operations in India offering corporate loans, investment banking, and credit cards to niche customer segments. Standard Chartered Bank (operating since the 1850s) and HSBC are among the oldest foreign banks in India. Barclays, JPMorgan Chase, Bank of America, UBS, Credit Suisse and others cater mainly to multinational corporations, high-net-worth clients, and trade transactions.

Some foreign banks like Citi also built a retail presence in major cities (though Citi sold its consumer business to Axis Bank in 2022), and Standard Chartered & HSBC run consumer banking for urban clientele.

Role and Contribution:

Foreign banks play a key role in bringing in capital and sophisticated financial products. They often facilitate foreign direct investment by providing banking to multinational corporations operating in India.

They are leaders in certain segments like foreign exchange trading, derivatives, and investment banking.

For example, many large Indian companies use foreign banks for overseas acquisitions advice or raising funds through external commercial borrowings.

On the retail side, foreign banks cater to a niche – typically high-income customers in big cities, offering premium services. – They contribute to innovation; for instance, foreign banks introduced concepts like 24/7 phone banking and premium credit cards in the Indian market.

List of Foreign Banks Operating in India

Foreign Banks from Europe

1. Standard Chartered Bank (UK)
2. HSBC (UK)
3. Deutsche Bank (Germany)
4. BNP Paribas (France)
5. Credit Agricole (France)
6. Societe Generale (France)
7. UBS (Switzerland)
8. Credit Suisse (Switzerland)
9. ING Bank (Netherlands)
10. Rabobank (Netherlands)
11. Commerzbank (Germany)
12. Barclays Bank (UK)
13. NatWest Markets (UK)

Foreign Banks from the United States & Canada

1. Citibank (USA)
2. JPMorgan Chase Bank (USA)
3. Bank of America (USA)
4. Goldman Sachs Bank (USA)
5. Morgan Stanley Bank (USA)
6. American Express Bank (USA)
7. State Bank of Mauritius (Mauritius)
8. Bank of Nova Scotia (Canada)

Foreign Banks from Asia (Largest Group)

1. Mizuho Bank (Japan)
2. MUFG Bank (Japan)
3. Sumitomo Mitsui Banking Corporation (Japan)
4. Bank of Tokyo-Mitsubishi UFJ (Japan)
5. Shinhan Bank (South Korea)
6. Woori Bank (South Korea)
7. Industrial and Commercial Bank of China (China)
8. Bank of China (China)
9. United Overseas Bank (Singapore)
10. DBS Bank India (Singapore)
11. Oversea-Chinese Banking Corporation (Singapore)
12. Doha Bank (Qatar)
13. Mashreq Bank (UAE)
14. Abu Dhabi Commercial Bank (UAE)

Foreign Banks from Australia & Others

1. ANZ Bank (Australia)
2. Westpac Banking Corporation (Australia)

Other Important Foreign Banks

1. First Abu Dhabi Bank
2. Krung Thai Bank
3. Bangkok Bank
4. CTBC Bank
5. Maybank
6. Qatar National Bank
7. Intesa Sanpaolo
8. KfW

Regulatory Aspects

RBI policy towards presence of foreign banks in India is based upon two cardinal principles viz. reciprocity and single mode of presence. By reciprocity, it means that overseas banks are given near national treatment in India only if their home country allowed Indian banks to open branches there without much restrictions. By single mode of presence, it means that RBI allows either of the branch mode or a wholly owned subsidiary (WOS) mode in India.

Some other policy guidelines of RBI towards foreign banks are as follows:

1. Banks have to adhere to mandated Capital Adequacy requirements as per Basel Standard.
2. They should have to meet minimum capital requirement of Rs. 5 billion.
3. They should need to maintain minimum CRAR at 10%.

Further, the foreign banks have to follow other norms as set by Reserve Bank of India. RBI requires foreign bank branches to meet local banking regulations, including maintaining CRR/SLR and priority sector lending. Notably, if a foreign bank has 20 or more branches, it is required to meet the full 40% priority sector target, just like Indian banks. Those with fewer branches have a different target focused on exports. Post global financial crisis, RBI has preferred the subsidiary model for systemic reasons, but most big foreign banks have not shifted to it yet.