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Several banks line up branches in US

BS Banking Bureau in Mumbai | December 09, 2004 10:47 IST

Refuting charges that the US banking sector is not as open as in India, John B Taylor, under-secretary of international affairs, said the regulatory authorities in the United States are processing a host of applications by Indian banks interested in opening branches.

Senior Indian bankers, however, pointed out that the applications are not being processed even if they were submitted quite some time back.

Taylor met Reserve Bank of India Governor Y V Reddy on Wednesday. From his discussions with the finance minister and the RBI governor it emerged that there will be a roadmap for hiking foreign investment in Indian banks from 49 per cent to 74 per cent by the year end as part of the increasing role of the foreign private sector in the Indian financial market.

He, however, declined to comment on the details of the meeting with the RBI governor and the reported differences of opinion between the RBI and the ministry over the hike in foreign stakeholding in Indian banks.

He said that the other areas discussed with governor were money laundering and prevention of terrorist financing.

Taylor said the US is interested in foreign direct investment in other areas like urban infrastructure and trade.

Even though he did not comment on the greenback, Taylor stated that the US is taking enough steps to increase private sector savings so as to avoid further widening of the deficit which is driving down the  dollar exchange rate globally.

The dollar has depreciated so much so that the market observers are now fearing a loss of reserve status  for dollar as a currency.

Taylor hailed the current global macroeconomic scenario as an ideal one with no recession, low inflation and interest rates  but declined to comment on oil prices or the forthcoming OPEC meeting on December 10.

He maintained that reducing trade barriers is one of the primary agenda to increase trade between the two countries, while he admitted that there is no control over states in US imposing restrictions on outsourcing from India.

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