Now’s the Time To Act On Foreign Bank Subsidiaries

.......RBI’s August 27 discussion paper on the structure of banking in India brings back the focus on foreign banks functioning in India which it has been looking to streamline since 2005. It favours entities such as Deutsche Bank, Citigroup and the Hong Kong and Shanghai Banking Corp to form a company in India, called subsidiarisation, instead of functioning as branches of their overseas parent companies. “The experience of the recent global financial crisis suggests that complex structures, too big to fail and too connected to fail, could exacerbate the crisis,” says RBI’s discussion paper. ..........

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