RBI Permits Banking Licence to Morgan Stanley

The Reserve Bank of India (RBI) has granted a banking licence to Morgan Stanley to expand its offerings to corporate banking, wealth management, foreign exchange, treasury and solidify relations with their clients from its current services such as advising clients on takeovers. However, it is unlikely to start banking activities such as corporate or retail loans.

This enables Morgan Stanley, a top-ranked advisor to extend its financial services by providing services like wealth management and lead over its rivals – Goldman Sachs, Merrill Lynch, Bank of America.

Morgan Stanley, along with Goldman Sachs was converted into a bank holding company during the period of credit crisis 2008 in U.S. Most global banks including JP Morgan, Bank of America does not offered consumer banking in India due to the tough competition from State Bank of India, HDFC bank and ICICI Bank.

The only reason forcing for no profits is the minimum mandated lending to agricultural activities. It limits priority at 32% for foreign banks and 40% for domestic banks. An official from Morgan Stanley told that the firm will have to bring all-para banking activities under the bank.