RESTRICTED
WORLD TRADE S/FIN/W/12/Add.47/Rev.1
12December 1997
ORGANIZATION(97-1830)
Original: English Committee onTrade inFinancial Services
COMMUNICATION FROM INDIA
Revised Conditional Offer onFinancial Services
Revision
Thefollowing communication iscirculated attherequest ofIndiatoMembers oftheCommittee
onTrade inFinancial Services.
_______________
1. India ispleased tosubmit theannexed revised draft conditional offer infinancial services.
Thisrevised offerisanimprovement toits28July1995schedule ofcommitments infinancial services
under theGeneral Agreement onTrade inServices.
2. Aspartofourrevised conditional offer, wewould alsodelete Article II(MFN) exemptions
relating tobanking services andother financial services subject toother WTO Members undertaking
MFN-based commitments.
3. India reserves therighttomodify, reduce orwithdraw thisofferinwhole orinpartdepending
ontheresults ofthenegotiations onfinancial services.
4. Indiaalsoreserves therighttomake technical changes totheschedule andtocorrect anyerrors,
omissions orinaccuracies.S/FIN/W/12/Add.47/Rev.1
Page2INDIA -REVISED SCHEDULE OFSPECIFIC COMMITMENTS -FINANCIAL SERVICES
Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional Commitments
FINANCIAL SERVICES
Thecommitments infinancial services aremade inaccordance withtheGeneral Agreement onTrade inServices andtheAnnex onFinancial Services. All
thecommitments aresubject toentry requirements, domestic laws, rules andregulations andtheterms andconditions oftheReserve Bank ofIndia, Securities
andExchange Board ofIndia andanyother competent authority inIndia.
A. Insurance and
Insurance-related services
Non-life, limited to
Insurance offreight
Ex.5(a)(i)(B)(1) Unbound except inthecaseofinsurance
offreight, where there isnorequirement
thatgoods intransit toandfrom India
should beinsured withIndian insurance
companies only. Insurance istaken by
thebuyer orseller inaccordance withthe
terms ofthecontract. Thisposition will
bemaintained. Once under acontract the
Indian importer orexporter agrees to
assume theresponsibility forinsurance
such asinthecaseoff.o.b. contracts for
imports intoIndia orc.i.f. contracts for
exports from India, insurance hastobe
taken onlywithanIndian insurance
company.(1) Unbound
(2) Unbound (2) Unbound
(3) Unbound (3) Unbound
(4) Unbound except asindicated inthe
horizontal section(4) Unbound except asindicated inthe
horizontal sectionS/FIN/W/12/Add.47/Rev.1
Page3Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional Commitments
Reinsurance and
retrocession
5(a)(ii)(1),(2) Reinsurance canbetaken withforeign
reinsurers totheextent ofthe
residual uncovered riskafter
obligatory orstatutory placements
domestically withIndian insurance
companies.(1) Unbound
(2) Unbound
(3) Unbound (3) Unbound
(4) Unbound except asindicated inthe
horizontal section(4) Unbound except asindicated inthe
horizontal section
Insurance intermediation,
limited toreinsurance
Ex.5(a)(iii)(1),(2) Reinsurance ofdomestic risks canbe
placed withforeign reinsurers
through overseas brokers, tothe
extent mentioned under reinsurance
andretrocession(1) Unbound
(2) Unbound
(3) (i)Overseas brokers areallowed tohave
resident representatives and
representative offices whocan
procure reinsurance business from
Indian insurance companies tothe
extent mentioned above. They can
alsoplace reinsurance business from
abroad withIndian insurance
companies.(3) Unbound
(ii)Except forthebusiness indicated
above, theresident representatives
andrepresentative offices cannot
undertake anyother activity inIndia.S/FIN/W/12/Add.47/Rev.1
Page4Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional Commitments
(iii)Allexpenses oftheresident
representatives andrepresentative
offices have tobemetbyremittances
from abroad andnoincome canbe
received inIndia from Indian
residents.
(4) Unbound except asindicated inthe
horizontal section(4) Unbound except asindicated inthe
horizontal section
B. Banking andother
financial services
(excluding insurance)
1.(i) Acceptance ofdeposits
andother repayable funds
from thepublic
5(a)(v)(1) Unbound
(2) Unbound(1) Unbound
(2) UnboundS/FIN/W/12/Add.47/Rev.1
Page5Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional Commitments
(ii) Lending ofalltypes,
including consumer credit,
mortgage, credit and
financing ofcommercial
transactions butexcluding
factoring
Ex.5(a)(vi)
(iii) Allpayment andmoney
transmission services
including credit, charge
anddebit cards, travellers
cheques andbankers '
drafts
5(a)(viii)
(iv) Guarantees and
commitments
5(a)(ix)(3) (i)Only through branch operations ofa
foreign bank licensed andsupervised
asabank initshome country.
(ii)Grant oflicence aspermissible under
existing laws.
(iii)Alimit oftwelve licences peryear
bothfornewentrants andexisting
banks.
(iv)Banks areallowed toinstall ATMs at
branches andatother places
identified bythem. Installation of
ATM ataplace other thanin
licensed branches istreated asanew
place ofbusiness andrequires a
licence. Licences issued forATMs
installed byforeign banks willnotbe
included intheceiling oftwelve
licences referred toinitem (iii)
above.(3) (i)Foreign banks arerequired to
constitute Local Advisory
Boards consisting inter aliaof
professionals andpersons
having expertise inareas such
assmall-scale industry and
exports. TheChairman and
members oftheLocal
Advisory Board must be
resident Indian nationals except
fortheChief Executive Officer
whomaybeaforeign national.
Theappointment ofChairman
andmembers oftheBoard
requires Reserve Bank ofIndia
approval.
(ii)Foreign banks arerequired to
publish consolidated financial
statements oftheIndian
branches asat31March every
year.
(v) Trading forownaccount
of:
(a) money market instruments
(b) foreign exchange
(c) transferable securities
Ex.5(a)(x)(A)(B)(E)(v)Investments inother financial
services companies bybranches of
foreign banks licensed todobanking
business inIndia individually notto
exceed 10percentofowned funds
or30percentoftheinvested
company 'scapital whichever is
lower.(iii)Public sector enterprises can
invest surplus funds interm
deposits only withscheduled
commercial banks incorporated
inIndia.
(vi) Portfolio management,
custodial andtrust
services
Ex.5(a)(xiii)S/FIN/W/12/Add.47/Rev.1
Page6Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional Commitments
(vii) Clearing services for
other banks forcheques,
drafts andother
instruments
Ex.5(a)(xiv)(vi)Licences fornewforeign banks may
bedenied when themaximum share
ofassets inIndia bothonandoff
balance sheet offoreign banks to
total assets bothonandoffbalance
sheet ofthebanking system exceeds
15percent.
(vii)Foreign banks aresubject to
non-discriminatory resource
allocation requirements.
(4) Unbound except asindicated inthe
horizontal section(4) Unbound except asindicated inthe
horizontal section
2. Participation inissues of
allkinds ofsecurities,
including underwriting
andplacement asagent
(whether publicly or
privately) andprovision
ofservices related tosuch
issues
5(a)(xi)(1) Unbound
(2) Unbound
(3) (i)Foreign banks branches licensed to
dobanking business inIndia.
(ii)Allowed forforeign financial services
companies (including banks) through
incorporation withforeign equity not
exceeding 51percent.(1) Unbound
(2) Unbound
(3) Unbound except forentities
established inaccordance withthe
limitations specified inthemarket
access column.
(4) Unbound except asindicated inthe
horizontal section(4) Unbound except asindicated inthe
horizontal section
3. Stock broking
Ex.5(a)(x)(E)(1) Unbound
(2) Unbound(1) Unbound
(2) UnboundS/FIN/W/12/Add.47/Rev.1
Page7Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional Commitments
(3) Through establishment oflocally
incorporated joint venture company with
foreign equity notexceeding 49percent.
Theforeign equity participation willbe
limited torecognized foreign stock
broking companies.(3) Unbound except forentities
established inaccordance withthe
limitations specified inthemarket
access column.
(4) Unbound except asindicated inthe
horizontal section(4) Unbound except asindicated inthe
horizontal section
4. Financial consultancy
services, i.e.financial
advisory services
provided byfinancial
advisers, etc.to
customers onfinancial
matters, investment and
portfolio research and
advice, advice on
acquisitions andon
corporate restructuring
andstrategy
Ex.5(a)(xvi)(1) Unbound
(2) Unbound
(3) (i)Foreign bank branches licensed todo
banking business inIndia.
(ii)Allowed forforeign financial services
companies (including banks) through
incorporation withforeign equity not
exceeding 51percent.
(4) Unbound except asindicated inthe
horizontal section(1) Unbound
(2) Unbound
(3) Unbound except forentities
established inaccordance withthe
limitations specified inthemarket
access column.
(4) Unbound except asindicated inthe
horizontal section
5. Factoring
Ex.5(a)(vi)(1) Unbound
(2) Unbound(1) Unbound
(2) Unbound
(3) Allowed forforeign financial services
companies (including banks) through
incorporation withforeign equity not
exceeding 51percent.(3) Unbound except forentities
established inaccordance withthe
limitations specified inthemarket
access column.
(4) Unbound except asindicated inthe
horizontal section(4) Unbound except asindicated inthe
horizontal sectionS/FIN/W/12/Add.47/Rev.1
Page8Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional Commitments
6. Financial leasing
5.(a)(vii)(1) Unbound
(2) Unbound(1) Unbound
(2) Unbound
(3) Allowed forforeign financial services
companies (including banks) through
incorporation withforeign equity not
exceeding 51percent.(3) Unbound except forentities
established inaccordance withthe
limitations specified inthemarket
access column.
(4) Unbound except asindicated inthe
horizontal section(4) Unbound except asindicated inthe
horizontal section
7. Venture capital (1) Unbound
(2) Unbound(1) Unbound
(2) Unbound
(3) (i)Allowed forforeign financial services
companies (including banks) through
incorporation withforeign equity not
exceeding 51percent.(3) Unbound except forentities
established inaccordance withthe
limitations specified inthemarket
access column.
(ii)Funding hastobeentirely outof
equity.
(4) Unbound except asindicated inthe
horizontal section(4) Unbound except asindicated inthe
horizontal section