In view of the current global financial meltdown, the Reserve Bank on Tuesday said it is holding back plans for liberalising the operation of foreign banks in the country.It is considered advisable for the time being to continue with the current policy and procedures governing the presence of foreign banks in India, RBI said in its annual monetary policy for 2009-10.
The roadmap was divided into two phases, the first phase spanning the period March 2005-2009, and the second phase beginning April 2009, after a review of the experience gained in the first phase, it said.
Without specifying the time line for the review, the RBI said, "the proposed review will be taken up after due consultation with the stakeholders once there is greater clarity regarding stability, recovery of the global financial system, and a shared understanding on the regulatory and supervisory architecture around the world."
The review when done, among other things, is expected to examine issues concerning extension of national treatment to wholly-owned subsidiary, dilution of stake and permitting mergers/acquisitions of any private sector banks in India by a foreign bank in the second phase.
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