Reserve Bank deputy governor R Gandhi today said four foreign lenders have applied to operate as wholly-owned subsidiaries (WOSes) in the country, and many others are in touch with the central bank for a possible shift in the nature of operations here.
"Discussions are going on and I think four have already applied, and we are processing their applications," Gandhi told reporters on the sidelines of the annual FIBAC conference here.
The Deputy Governor, however, refused to share the names.
So far, only the Singaporean lender DBS and State Bank of Mauritius have publicly stated their interest in converting their franchise models in the country into local subsidiaries.
Operating as a WOS is favoured by the RBI as it helps ring-fence the local unit from any pressures that its parent may face in its home market or in its other international operations, and the demand for getting them incorporated locally have been on ever since the 2008 global credit crisis.
There are close to 100 foreign lenders operating in the country at present and all of them operate through branches or as representative offices.
In November 2013, the RBI had come out with a new policy incentivising WOS and also ensured changes in laws, including tax and stamp duty benefits and near-total national treatments, but none of the lenders fell in line so far.
"At some point in time if the carrot does not work, we may need to push a little harder, as some of the jurisdictions across the world have done," Governor Raghuram Rajan had said after issuing the new subsidiarisation norms.
Under the new RBI rules, those foreign lenders with 20 or more branches have to mandatorily get local subsidiaries over the next few years.
Also, those entering the country after August 2010 would have to mandatorily follow local subsidiary route.
Currently, only two British lenders -- Standard Chartered and HSBC -- and the American lender Citigroup have over 50 branches each and fall under the mandatory WOS route.
Since the RBI started calling for WOS route, only three large banks entered the country - ICBC of China in 2012, FirstRand Bank of South Africa in 2013 and Doha Bank of Sultanate of Qatar in June.
All these lenders, while entering the country, had expressed their willingness to follow the WOS route as and when mandated.
