New Delhi: The Government has announced that foreign banks can set up 100 per cent subsidiaries in India.

It has also allowed take overs by foreign banks by permitting acquisition of up to 74 per cent stake in existing private bank to set up a subsidiary.

The foreign banks have to however, choose only one among the three alternatives of having a branch network or a wholly-owned subsidiary or a private banking subsidiary with aggregate foreign holding of up to 74 per cent.

Thus, a foreign bank will be allowed to establish a wholly-owned subsidiary either through conversion of its existing branches or through as fresh banking licence.

Only foreign banks regulated by a banking supervisory authority in their home country would be allowed to adopt the 100 per cent subsidiary route.