CONTENTS DECLARATION; CERTIFICATE; ACKNOWLEDGMENT; LIST OF ABBREVIATIONS; RESEARCH METHODOLOGY; 1. Introduction; 1.1. Meaning of Foreign Investment; 1.2. Evolution of Indian Policy on Foreign Investment in Banking; 2. Commitments of India under the GATS; 2. Overview of the GATS; 2.2. GATS and Financial Services; 2.2. 1. Annex on Financial Services; 2.3. Commitments of India under the GATS; 3. Statutory Framework Governing Banks in India; 3.1. Scheduled and Non-Scheduled Banks; 3.2. Framework under the Banking Regulation Act; 3.2.1. Requirement as to minimum paid up capital 3.2.2. Licensing of banks; 3.2.3. Branch Expansion; 3.2.5. Ownership and voting rights in banks; 3.2.6. Other regulations on banks; 4. Foreign Investment in Banking in India - The Regulatory Framework; 4.1 .2.Issue of Shares through ADR/GDR; 4.1.2,1. Routing of funds; 4.1.3. Foreign Institutional Investment; 4. I.3.1. Routing of funds; 4.1.4. NRI Investment; 4.l .4. Routing of funds; 4.2. Structuring of Foreign Investments through Tax Havens; 4.3. Policy Framework on Foreign Investment in Banking; 4.3 .l. Cap on FDI in private sector banks; 4.3.2. Cap on foreign investment in public sector banks; 4.3.3. Calculation of foreign investment in Indian Banks; 4.4. Modes of Foreign Participation in Indian Banking Sector; 4.4.3. Acquisition of control over 5 per cent in a private bank; 4.4.4. Restriction on shareholding by different entities in a private sector bank; 4.4.5. Norms for corporate governance in private sector banks; 4.4.1. Requirements to be satisfied for foreign investment in private banking sector; 4.4.2. Transfer of shares; 4.4.6. Presence of foreign banks in banking in India; 4.4.6.1. Phase I of the Roadmap for the Presence of Foreign Banks in India; a. Wholly Owned Subsidiary; b. Acquisition of holding in private sector banks identified by the RBI for restructuring; c. Branches; 4.4.6.2. Phase II of the Roadmap for the presence of foreign banks in India; 4.4.6.3. Foreign Banks adopting the NBFC Route; 4.4.7. Current Position on the presence of foreign banks in India; 4.4.7 .l . Report of the CFSA; 4.4.7.2. Annual Policy Statement for the Year 2009-10 5. Foreign Investment in Banking - Allied Requirements; 5.1. Requirements under the Companies Act; 5.2. Acquisition of Immovable Property; 5.3. Prudential Measures in relation to Exposure Norms; 5.4. Measures on Capital Adequacy and Market Discipline - Basel II; 5.5. Lending to Priority Sectors; 5.6. Tax Implications on Foreign Investment in Banking in India; 5.7. Exposure of banks to NBFCs; 5.8. Borrowing Limit; 5.9. Remittance of profits; 6. Need and Demerits of Foreign Investment in Banking; 6.1. Need of Foreign Investment in Banking; 6.2. Reverse side of the coin - Demerits of foreign investment and participation in banking; 7. Conclusion and Suggestions; 8. Bibliography