Foreign Banks in India: HSBC, Citi, Standard Chartered & More

Introduction: Global Banking on Indian Soil

When a multinational corporation needs to move funds between India and Singapore, they turn to a foreign bank. When an NRI wants seamless banking between their home country and India, they often choose a foreign bank. When a wealthy Indian entrepreneur needs sophisticated private banking and global investment options, foreign banks compete fiercely for their business.

Foreign banks in India occupy a unique niche—they bring global expertise, international connectivity, and sophisticated products, but operate within the framework of Indian regulations. They’re not mass-market banks; they’re specialists serving corporations, high-net-worth individuals, and internationally-connected customers.

What Are Foreign Banks?

Definition

Foreign banks are banks incorporated outside India that operate in India through:

• Branches – The traditional model, with physical presence
• Wholly Owned Subsidiaries (WOS) – Separately incorporated Indian entities

Current Status

Operating in India:

• 46 foreign banks from 22 countries
• ~270 branches across India
• Concentrated in metros and major cities

Key Characteristics

History of Foreign Banking in India

Pre-Independence Era

Foreign banks were among the first modern banks in India:

• 1853: Chartered Bank opens in Calcutta
• 1858: Standard Chartered established
• 1869: HSBC opens in India
• British banks dominated colonial commerce

Post-Independence (1947-1990)

Controlled Entry:

• Existing banks continued
• New entry restricted
• Nationalization of Indian banks (1969, 1980)
• Foreign banks operated under tight controls

Liberalization Era (1991 onwards)

Gradual Opening:

• New licenses to foreign banks
• Branch expansion allowed
• WOS route introduced (2013)
• Equal treatment (PSL norms)

Recent Developments

2013: WOS framework introduced 2015: DBS becomes first WOS 2020-22: Citi exits consumer banking, sells to Axis 2024: Continued consolidation

Major Foreign Banks in India

1. HSBC India

The Largest Foreign Bank in India

Profile:

• Full Name: Hongkong and Shanghai Banking Corporation
• Entry: 1853 (one of the oldest)
• Branches: 26
• Headquarters (India): Mumbai
• Global Headquarters: London

Key Facts:

• Largest foreign bank by assets in India
• Strong corporate and investment banking
• Growing retail footprint
• Focus on trade finance and cross-border

Services:

• Corporate banking
• Investment banking
• Trade finance
• Wealth management
• Retail banking
• NRI services
• Treasury

Target Customers:

• Large corporations
• MNCs in India
• High-net-worth individuals
• NRIs

2. Standard Chartered

British Bank with Asian Focus

Profile:

• Entry: 1858 (via Chartered Bank)
• Branches: 100+
• Headquarters (India): Mumbai
• Global Headquarters: London

Key Facts:

• Longest presence among foreign banks
• Strong in personal banking (for a foreign bank)
• Wealth management focus
• Digital banking initiatives

Services:

• Priority banking
• Wealth management
• Corporate banking
• Trade finance
• Treasury
• Credit cards
• Personal loans

Target Customers:

• Affluent individuals
• Corporations
• NRIs
• Cross-border businesses

3. Citibank India

Transition Story

Profile:

• Entry: 1902
• Status: Sold consumer business to Axis Bank (2022)
• Current Focus: Institutional only

Pre-2022:

• Leading credit card issuer
• Strong wealth management
• Premium banking services

Post-2022:

• Exited consumer banking
• Retained institutional clients corporate banking
• Investment banking through Citi
• Markets and securities services

Why Exit:

• Global strategic review
• India retail not core
• Regulatory complexities
• Capital allocation priorities

4. DBS Bank India

First WOS Foreign Bank

Profile:

• Entry: 1995 (as branch), 2019 (WOS)
• Parent: DBS Singapore
• Status: Wholly Owned Subsidiary
• Branches: 35+

Key Facts:

• First foreign bank to become WOS
• Acquired Lakshmi Vilas Bank (2020)
• Growing retail presence
• Digital banking focus (digibank)

Services:

• Savings accounts
• Fixed deposits
• Loans (personal, home, car)
• Corporate banking
• SME banking
• NRI banking
• Digital banking

Digibank:

• Digital-first platform
• Paperless account opening
• AI-powered services
• Growing customer base

5. Deutsche Bank

German Corporate Specialist

Profile:

• Entry: 1980
• Headquarters (India): Mumbai
• Focus: Corporate and investment banking

Services:

• Corporate banking
• Investment banking
• Trade finance
• Treasury
• Cash management

Target:

• German/European MNCs
• Large Indian corporates
• Institutional clients

6. Barclays

UK Bank’s India Operations

Profile:

• Entry: 1990
• Focus: Corporate and investment banking

Services:

• Corporate banking
• Investment banking
• Private banking (exited)
• Credit cards (partnership model)

7. BNP Paribas

French Bank

Profile:

• Parent: BNP Paribas (France)
• Focus: Corporate, investment banking

Services:

• Corporate banking
• Investment banking
• Wealth management (BNP Paribas Wealth Management)

8. JPMorgan Chase

American Giant

Profile:

• Entry: 1922 (as branch)
• Focus: Investment banking, corporate

Services:

• Investment banking
• Corporate banking
• Treasury services
• Securities services

Other Notable Foreign Banks

Regulatory Framework

RBI Regulations

Foreign banks are subject to same regulations as domestic banks:

Capital Requirements:

Priority Sector Lending:

• 40% of ANBC (same as domestic banks)
• Shortfall to be deposited in funds
• RIDF, NABARD contributions

Branch vs WOS

Branch Model:

• Part of parent bank globally
• Limited local incorporation
• Regulatory permission for each branch

Wholly Owned Subsidiary (WOS):

• Separately incorporated in India
• Local board and governance
• More operational flexibility
• National treatment
• Deposit insurance (DICGC)
• Branch expansion freedom

RBI Preference: RBI encourages WOS model for larger operations.

Entry and Expansion

New Entry:

• RBI approval required
• Capital requirements
• Parent bank standing
• Home country regulations
• Reciprocal arrangements

Branch Expansion:

• Permission-based
• Priority to underbanked areas
• Limited annual additions for branches

Services Offered

Corporate Banking

Products:

• Working capital finance
• Term loans
• Trade finance (LCs, BGs)
• Cash management
• Forex services
• Treasury products

Strengths:

• Global network advantage
• Cross-border expertise
• Sophisticated products
• MNC relationships

Investment Banking

Services:

• M&A advisory
• Equity capital markets (IPOs)
• Debt capital markets
• Restructuring
• Private equity advisory

Major Players:

• JPMorgan
• Goldman Sachs (securities)
• Morgan Stanley
• Citi
• HSBC
• Deutsche Bank

Trade Finance

Products:

• Letters of Credit
• Bank Guarantees
• Export/Import financing
• Documentary collections
• Supply chain financing

Advantage:

• Global correspondent network
• Cross-border expertise
• Multi-currency capability

Wealth Management

Services:

• Investment advisory
• Portfolio management
• Estate planning
• Tax planning
• Global investments

Minimum Ticket:

• Priority Banking: ₹10-25 lakhs
• Private Banking: ₹1-10 crores
• Ultra-HNI: ₹10+ crores

NRI Banking

Products:

• NRE/NRO accounts
• FCNR deposits
• Remittances
• NRI home loans
• Investment services

Advantage:

• Global presence
• Seamless remittances
• Multi-currency accounts

Retail Banking (Limited)

Only some foreign banks offer retail:

Standard Chartered:

• Savings accounts
• Credit cards
• Personal loans
• Home loans

DBS:

• Digibank savings
• Loans
• Credit cards (limited)

Most Others:

• Focused on HNI/Priority only
• No mass retail

Target Customer Segments

Who Banks with Foreign Banks?

1. Multinational Corporations

• Global treasury management
• Cross-border trade
• Parent company relationships

2. Large Indian Corporates

• ECB (External Commercial Borrowings)
• Trade finance
• Investment banking services

3. High-Net-Worth Individuals

• Wealth management
• Global investment access
• Premium services
• Tax-efficient structures

4. NRIs and PIOs

• Cross-border banking
• Remittances
• Investment in India

5. Exporters/Importers

• Trade finance expertise
• Multi-currency facilities
• Global network

Who Should NOT Consider Foreign Banks?

• Mass retail customers (limited branches)
• Small businesses (high minimums)
• Rural customers (no presence)
• Those seeking basic banking

Comparing Foreign Banks with Domestic Banks

Advantages of Foreign Banks

For Corporates

1. Global Network:

• Correspondent banks worldwide
• Seamless cross-border transactions
• Multi-country operations support

2. Sophisticated Products:

• Complex derivatives
• Structured finance
• ECB expertise
• Trade finance innovations

3. MNC Relationships:

• Parent company banking
• Global account management
• Consistent service worldwide

For Individuals

1. Premium Services:

• Dedicated relationship managers
• Priority access
• Exclusive lounges

2. Global Access:

• International cards
• Overseas branches
• Multi-currency accounts

3. Wealth Management:

• Global investment options
• Sophisticated advisory
• Estate planning

Challenges for Foreign Banks

Regulatory Constraints

Issues:

• Branch expansion limits
• Priority sector requirements
• Reporting requirements
• Local content norms

Limited Scale

Challenges:

• Small branch network
• Concentration in metros
• Cannot compete on volume

Competition

From:

• Strong Indian private banks
• PSBs improving services
• Fintechs in payments
• Domestic banks’ MNC coverage

Cost Structure

Issues:

• Expatriate staff costs
• Compliance infrastructure
• Low volume, high fixed costs
• Regulatory compliance costs

Strategic Reviews

• Several banks have exited/reduced India
• Global priorities change
• India retail not always core

Choosing a Foreign Bank

For Corporate Banking

Consider:

For Wealth Management

Consider:

For NRI Banking

Best For:

Future of Foreign Banking in India

Trends

1. Consolidation:

• More exits likely
• Focus on profitable niches
• Cost rationalization

2. Digital Push:

• API banking
• Digital corporate services
• Fintech partnerships

3. WOS Transition:

• More branches to WOS
• Better local integration
• National treatment benefits

4. Niche Focus:

• Investment banking
• Trade finance
• Wealth management
• Treasury services

5. India as Hub:

• Back-office operations
• Technology centers
• GCCs (Global Capability Centers)

Challenges Ahead

• Regulatory complexity
• Capital requirements
• Competition intensity
• Strategic prioritization
• Talent retention

Key Takeaways

1. 46 foreign banks – From 22 countries, ~270 branches
2. Niche focus – Corporate, HNI, NRI, not mass retail
3. Global network advantage – Cross-border expertise
4. Same regulations – PSL, CRAR norms apply
5. Limited branch network – Concentrated in metros
6. Premium services – Higher fees, better service
7. WOS preferred – RBI encourages subsidiary model

Disclaimer

This article is for educational purposes only. Foreign bank services and offerings change frequently. Verify current products and eligibility with respective banks. This is not financial advice.

Frequently Asked Questions

Q: Can a regular person open account in foreign bank? A: Some like Standard Chartered and DBS offer retail banking. But minimum balances are typically higher than domestic banks.

Q: Are foreign bank deposits safe? A: Yes, branches are RBI-regulated. WOS deposits are DICGC insured up to ₹5 lakhs.

Q: Why did Citi exit India retail? A: Global strategic decision to focus on institutional business. India retail was not core to global strategy.

Q: Which foreign bank is best for NRIs? A: HSBC and Standard Chartered are popular due to global presence. DBS good for Singapore-India corridor.

Q: Do foreign banks give home loans? A: Some do (Standard Chartered, DBS) but typically to high-income customers with larger loan amounts.

Q: Why are foreign bank fees higher? A: Premium services, smaller customer base, higher operating costs, and focus on HNI segment.

Q: Can foreign banks operate anywhere in India? A: No, branch expansion requires RBI approval. Most are concentrated in metros and large cities.

Foreign banks bring global sophistication to Indian banking—they’re not for everyone, but for those who need international connectivity, cross-border expertise, or premium wealth management, they offer unmatched capabilities.