With the removal of capital gains tax while converting a foreign bank branch to a wholly-owned subsidy, they should feel not only less taxing but also comfortable. Because they are protected from what is happening to the parent bank. Past experience confirms this advantage. RBI guidelines should make them on par with Indian bank branches. FDI restriction to 74% and divesting the balance should come as a boom for all concerned. And foreign bank branches should give a boost to competition for the health of the industry.
- Jacob Sahayam, Thiruvananthapuram (FE)
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