Reserve Bank of India (RBI) asked Foreign Bank branches to convert into local entities.
Foreign banks entering India are being asked by Reserve Bank of India (RBI) to agree to a clause requiring them to convert their branch operations into a Wholly-Owned Subsidiary (WOS), once domestic incorporation for these banks is made compulsory. RBI is believed to incorporating the condition at the time of giving permission for the entry of a new foreign bank. RBI has emphasized that from the financial stability perspective there would be a need to mandate a subsidiary form of presence at the entry level itself. Similarly, it would be mandatory for those fresh entrants who establish branches to convert to WOS when they become systemically important by virtue of their balance-sheet size.