Likewise, foreign banks have been given more liberal entry. Recently, the norms for entry of new private banks were rationalised. Two new private sector banks have been given ‘in-principle’ approval under these revised guidelines.
The Union Budget 2002-03 has also provided a fillip to the foreign banking segment, permitted these banks, depending on their size, strategies and objectives, to choose to operate either as branches of their overseas parent, or, corporatize as domestic companies. This is expected to impart greater flexibility in their operations and provide them with a level-playing field vis-à-vis their domestic counterparts.