The country's central bank announced a raft of new regulations this week aimed at encouraging foreign-owned banks to expand in the country and potentially even acquire domestic Indian banks, according to a report by Reuters
The Reserve Bank of India will now allow foreign banks such as HSBC and Citigroup to transition from a branch structure to becoming wholly owned subsidiaries, which means that they would be treated on nearly the same terms as local lenders.
This would mean these banks would be able to open a lot more outlets across the country, which has the world's second largest population at 1.27 billion people.
But foreign banks may have to give something back in return - they could face having to earmark 40% of their lending to the 'priority sector', which includes under-served parts of the economy.
The foreign banks are said to be considering the implications, with one unnamed source saying only those institutions with retail banking ambitions would consider it worth the trade-off.
Other foreign banks in the country include Standard Chartered and Singapore's DBS.
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