FOREIGN BANKS IN INDIA: A LITERATURE REVIEW

ABSTRACT

In response to statement by the current Governor of RBI, the study seeks to contribute to the debate relating to further deregulation of foreign banks in Indian context. The stakes in the debate are quite high and the debate need to be informed by history, theory as well as objective reality of foreign banks operating in India. In this context, the present study contributes to the debate by analyzing the evolution of foreign banks, beginning with the colonial era, up to the current period. It carries on the analysis till 2013 and concludes that foreign banks enjoy high profits despite entry of new foreign banks. Post reforms phase saw a significant rise in the number of banks after deregulation of entry was found to be accompanied by considerable fluctuations. It is not apparent how supposed benefits of entry of foreign banks will accrue to the economy in the absence of stability of new entrants.

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