Foreign banks find India easier than China for expansion: Report

Foreign banks investing more in India amid higher entry barriers in China: Report

New Delhi, Oct 19

"India is becoming easier to plan for, especially for banks willing to commit local capital or buy into an Indian platform," Saumitra Sehgan, a partner at Roland Berger, told the publication.

The report highlights that India attracted several major foreign investments in 2025, including Sumitomo Mitsui Banking Corp.'s $1.6 billion purchase of a 20 per cent stake in Yes Bank. Mitsubishi UFJ Financial Group, Inc. also agreed to pay $4.3 billion for a 20 per cent stake in Shriram Finance Ltd., a nonbank lender. Emirates NBD announced a $2.75 billion acquisition of 60 per cent of RBL Bank, closing the deal in June.

Sehgan said these deals showed that foreign banks increasingly regard acquisitions and partnerships as practical ways to expand in India's $3.65 trillion banking market.

The report points out that China, on the other hand, is finding it difficult to attract more foreign investments despite easing restrictions since 2001.

Foreign banks' share of China's $70.93 trillion banking market fell to 1.2 per cent in 2024 from 1.5 per cent in 2020, according to Laurent Doucet, a partner at Roland Berger.

The report cites Roland Berger as saying that foreign banks establishing locally incorporated units in China need at least $149 million in capital, compared with $53 million for wholly owned units in India.

China also allows foreign bank branches with minimum operating funds of $29.9 million (RMB200m), although restrictions limit their retail banking activities.

The article states that despite regulatory liberalisation, the number of locally incorporated subsidiaries and foreign branches in China have plateaued since 2018, with a few players even exiting retail business due to fierce competition.

— IANS