Foreign Banks07/08/2022 0 By indiafreenotes
Foreign banks are registered and have their headquarters in another country, but they have branches in our country. A foreign bank branch is a type of foreign bank that is required to follow both the home and host country’s regulations. Banks frequently open a foreign branch in order to better serve their multinational corporate clients.
- Foreign banks enter host countries with new technology that contributes to the country’s technological development.
- The entry of foreign banks has a positive impact on the regulatory and supervisory regimes of the host country because they will be able to learn about the regulatory and supervisory regimes of foreign banks’ home countries.
- Foreign banks have a greater ability to invest in more sectors than domestic banks in the host country because they have a larger economic scale and risk diversification techniques.
- The presence of a foreign bank in a developing country also contributes to the transmission of best practices in the banking industry.
- The entry of a foreign bank increases competition, which has an automatic positive impact on the development of the country’s banking sector.
- Over the years, foreign banks have made significant contributions to the banking sector by bringing capital and global best practices, as well as grooming talent.
- Sinceforeign banks are profit-driven; they focus primarily on large cities with high business potential, and in such a case, foreign banks would be ineffective in achieving government policy to make banking services available throughout the country.
- While foreign banks bring a large amount of capital to the host country, they also bring the potential to transfer financial shocks from their home country.
- During an economic or political crisis, foreign bank branches may face various challenges.
- They will be harmed by events in that foreign country because they are operating there during a crisis.
- A crisis-stricken government is more likely to use its limited resources to assist domestic banks. Foreign banks may be forced to bail out their own subsidiaries.
Some foreign banks in India:
- Citi Bank
- Standard Chartered Bank
- HSBC India
- Deutsche Bank
- NatWest Markets PLC
- DBS Bank
- Barclays Bank
- Bank of America
- Bank of Bahrain and Kuwait
- Doha Bank