Taking into account the feedback received on the Discussion Paper, the framework for setting up of wholly owned subsidiary (WOS) by foreign banks in India was released in November 2013. Those foreign banks which have commenced banking business in India through a branch mode after August 2010 shall convert into a wholly owned subsidiary if they meet the set conditions and prescribed regulatory thresholds.
The conditions would be, such as, foreign banks incorporated in a jurisdiction having legislation giving a preferential claim to deposits of home country in a winding up proceedings; foreign banks that do not have adequate disclosure requirements in their home jurisdiction; foreign banks with complex structures; foreign banks which are not widely held could have maiden presence only by way of WOS.