NEW DELHI: Foreign financial institutions (FFI) have brought in
capital to the tune of Rs 26,000 crore into the country till December
2007, the Government said on Tuesday.
The Finance Minister Mr P Chidambaram, however, insisted that it was
not a "massive infusion" considering the size of the Indian economy.
"The capital brought by FFIs which include banks and non-banking
financial companies as of December 31, 2007 is abou t Rs 26,000
crore," he told the Rajya Sabha during the Question Hour. In the
banking sector, he said, the government's policy was to allow healthy
competition among public sector, Indian private sector and foreign
banks.
"This will not only help expansion of the banking sector, but also
improve efficiency and bring new products into the market," he said in
reply to a question.
To a question on rural lending by foreign banks, he said the
government has not allowed such institutions to open branches in rural
areas. So far, foreign banks have opened branches only in tier 1 and
large cities like Mumbai, Kolkata, Ahmedabad, Chennai and Noida, he
added. He said if these banks are allowed to open branches in rural
areas, the government could ask them to follow the same guidelines
that apply to Indian banks. Government figures showed that paid up
share capital of foreign banks stood at Rs 17,630 crore in December
2007, up from Rs 13,079 crore in March, while their tier 1 and tier 11
capital rose Rs 40,892 from Rs 33, 134 in the same period.
Source : Rediff Finance
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