Foreign banks may get 100 branches

The commerce ministry has proposed to permit wholly owned subsidiaries of foreign banks to increase the number of their branches in India to 100, from the present 20. In May last year, the government had offered to increase the number to 20.

The proposal is a part of the ministry's draft cabinet note on improved revised offers for the services sector to be made at the WTO.

There are other sector-specific proposals in the note. These include binding foreign direct investment limit in the petroleum and power sector at 51 per cent.

The ministry has also proposed to increase the binding limit for FDI in telecom to 74 per cent from the 49 per cent offered earlier.

However, there is no change proposed in the insurance FDI limit of 26 per cent. Courier services are also included in the proposal. Sectors like retail, and legal and accountancy services have not been included.

Various ministries will give their inputs on these draft proposals within a week. Subsequently, the commerce ministry will finalise its stand, to meet the July-31 deadline for WTO members to submit their improved revised offers in the services sector.

Binding FDI limits at the WTO means that the concerned country will not reduce the investment cap below that limit for overseas investors. The bound limits for petroleum and power are lower than the actual FDI limit of 100 per cent allowed under the government's FDI policy.