Compared to other emerging markets, accelerated growth in the domestic economy provided greater business opportunities to foreign banks in India, resulting in higher profitability.
Expect rate rise pause, amid market expectations to the contrary.
Volatility in domestic share market acting as catalyst.
"Companies are looking for longer maturities, typically one year and above (for bulk deposits), while banks want funds for a short tenure," said B A Prabhakar, executive director, Bank of India.
Life Insurance Corporation of India, Housing Development Finance Corporation and State Bank of India together own a little over 45 per cent in IL&FS. The deal is expected to be valued around $2.5 billion.
The finance ministry's plan to offer basic banking licences may find few takers because of doubts over the commercial viability of the proposed business model.
Banks have started putting the brakes on short-term corporate loans.
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