Citigroup's Citibank arm is expanding keenly in India but is wary of taking stakes in local banks because of a cap on foreign equity and limits on voting rights, company officials said on Thursday.

Sanjay Nayar, chief executive of the bank's Indian unit, said at a news conference in Bangalore that Citibank was "always looking at the market" to find ways to expand but found that the central bank limitations were a big hurdle.

Rivals such as HSBC and ABN Amro have expanded in the retail business in India, while ING Group has acquired 44 per cent of Bangalore-based Vysya Bank, which has since been renamed ING Vysya Bank.

"Forty-nine per cent is not adequate from our point of view," Nayar said, referring to the highest stake a foreign bank can hold in an Indian bank, adding that this was further limited by voting rights restricted to 10 per cent.

Citibank has been an aggressive player in India as a lender since the 1980s, much before India eased up the entry of foreign banks under a liberalisation programme that started in 1991.

Citibank has tried to boost business in India by targetting expatriate Indians, wealthier customers, business accounts and individual accounts created through corporate clients to increase its source of funds, said Sarvesh Sarup, consumer bank head for Citibank India.

"A multiple distribution mechanism is the key," said Jean Paul Votron, Citibank NA's group executive for Central and Eastern Europe, Middle East, Africa and the Indian sub-continent. He added: "We'd be happy with more branches anyway."

Citibank has consolidated its presence in India by expanding into truck finance, in which it holds a 16 to 18 per cent market share, bank officials said. A Citibank affiliate holds 14.9 per cent of India's Shriram Transport Finance Ltd.

The bank has more than 1.7 million credit card customers in India, in a market which presently has six million credit cards and five million debit cards, Sarup said.