India on Wednesday conveyed to the US administration its serious concern over prolonged delays in allowing Indian banks to start operations in the US, saying it is creating impediments in growing bilateral business relations.

"The government today again raised the issue (of bank licences) during discussions with US officials. The government is hopeful of early resolution of the matter," minister of state for industry, Ashwini Kumar, told reporters on the sidelines of the US-India Business Summit in Mumbai.

US has not cleared proposals by the State Bank of India [Get Quote] and Bank of Baroda [Get Quote] to expand its network in the US and by Bank of Baroda and ICICI Bank [Get Quote] to start operations there for almost three years now on grounds of India not enforcing anti-money laundering laws effectively to check flow of money to terrorists.

Franklin Levin, US under secretary (international trade), said, "Indian banks are welcome to be in the United States. He said AML was certainly an issue a year ago, but wasn't sure whether it still remained a hurdle.

He, however, said foreign banks in India have just over 6 per cent market share against 18 per cent in the US.

BoB had applied for a branch licence in Houston. It already has one branch in New York.

Unless there are more US banks in India and vice versa, it would be difficult to say that the two countries have hassle-free environment for business, chairman and managing director, Anil Khandelwal, said.

Following terror attacks on September 9, 2001, the US government has been extremely cautious about money laundering.

It considers that certain geographies are more prone to become conduit for terrorist funds and it wants strict customer information and money laundering regulations to be in place in countries, which want their banks to have presence in the US.

Indian already has AML law in force, prescribed KYC norms in the financial sector and established financial intelligence unit to keep a trail of movement of funds.