Credit Suisse Group has announced don Monday that it has received in principle clearances from the Reserve Bank of India for setting up branches in India.

The approval shows that RBI is loosening up and appears ready to allow foreign banks to enter the country. The RBI has been slow in granting access to foreign lenders to operate in the country.

A report released by the central bank last week noted that the banking system in the country has off-balance sheet exposure concentrated on a few foreign banks and that is a cause of worry.

The bank thorough its branch in Mumbai will be able to accept deposits and provide financing to its customers. It will also be allowed to deal in Indian securities. As the financial crisis hit the global economy, the plan for future of foreign banks' operations in the country was put on hold until further review by the central bank.

Kai Nargolwala, chief executive of Credit Suisse Asia Pacific said "This is a key pillar of our Asia Pacific strategy of developing our on-shore presence in major markets throughout the region."

The bank offers wealth management, investment banking and asset management services in India. It acquired a non-banking financial company in 2008 in the country and also invested $203 million capital to boost up its balance sheet.

The bank employs 40 employees in the wealth management business and has two centers in Pune and Mumbai to provide IT, operations, and financial accounting and human resources services to its businesses globally in which it employs 3,600 people.

The World Trade Organization regulations state the central bank should allow 12 branch licenses to foreign banks every year. RBI ha already allowed UBS, FirstRand Bank and Commonwealth Bank of Australia and ANZ to start operations in the country. The RBI has also allowed eight branch licenses to Singapore bank DBS.