The Reserve Bank of India has approved Morgan Stanley's application to engage in commercial banking in India.
"Morgan Stanley has received an in-principle approval for a banking licence from the Reserve Bank," a spokesman of the company said in an email,.
So far, Morgan Stanley has been an investment banker in India and was the the top player in this space last year ahead of rivals including Goldman Sachs and Bank of America Merrill Lynch.
Following the 2008 credit crisis, RBI has been pushing for the subsidiary route for MNC lenders in the country against the branch banking route, citing easiness of regulatory control.
Entering the banking space will allow Morgan Stanley India to lend to corporates, whom it currently advises on takeovers.
According to sources, though the bank is keen on getting into banking, it may stay off retail banking at least to begin with, and will focus on treasury, foreign exchange and corporate banking activities.
Do you know more about this story? Contact us anonymously through this link.