Indian Controlled banks

Yeah--- I always thought and felt proud that ICICI and HDFC are indian banks waiting to emerge as Indian MNCs in the market of the future, however was surprised to see in the economictimes that they have been termed by RBI as foreign owned banks.

The reason is quite simple- RBI defines an Indian Bank where > 50% of the banks equity is owned by Indians. Presently > 75% of these banks are owned by foreign entities.

So what does it mean for these banks? Quite a bit actually.

RBI has definitive criteria on foreign banks expansion in India and also the kinds of products that they can sell-- eg Insurance.

That is the simple reason why you dont see a Citi on every street and corner!-- Bank branches or ATM... whatever.

So foreign banks have been quite clever to dodge the way to get into the Indian Market. I am sure that the companies who have a significant stake in HDFC bank would be a CITI or others. In fact i do remember rumours about the fact of a takeover of a HDFC/ Merger with citi sometime back.

It is good that the RBI has taken this move-- to protect our companies and our responsibilities...

Indian Controlled for now-- Not sure how much longer