Foreign banks may get entry in India but only if they fulfill the condition that they participate in the total financial inclusion.
Senior officials of the finance ministry say that RBI is eager to reciprocate signals by UK, Europe and US.
As of now, 12 banks of foreign origin can start branches in India, within a year and this number will go up to 20.
This decision follows UK expressing interest in allowing Indian banks to function there.
Indian banks have about 125 branches overseas and around 21 associates. The biggest lender of the country, State Bank of India receives 12% of its income from overseas.
Bank of Baroda plans to open 12 branches abroad this fiscal, Allahabad Bank and IDBI Bank intend to start operations in Dubai, Beijing and Singapore.
Finance minister Pranab Mukherjee said to the bankers, “The global banking landscape is changing fast. Indian banks should use this opportunity to carve out a place for themselves at the global platform.”