By setting up wholly-owned subsidiaries in India, foreign banks will get more opportunities and freedom to expand, but with some conditions, Reserve bank of India (RBI) Governor Raghuram Rajan said.

Mr. Rajan said that the central bank would soon announce new rules for allowing foreign banks entry into domestic banking market. He noted that foreign bank might later take over some Indian banks.

However, he added that for getting near national treatment in India, foreign banks would have to meet a couple of conditions.

Speaking on the topic, he explained, "Your [foreign bank's] country should allow the same to our own banks -- and second you come through one route - either you have a branch or you have a subsidiary; don't do both."

Mr. Rajan was addressing a gathering at an event of the Institute of International Finance (IIF) on last Saturday.

Under the current rule, foreign banks can open and operate branches in India but they are restricted by a number of restrictions. For example, the Indian central bank decides the number of branches that a foreign bank can open in the country.

Meanwhile, the central bank is preparing to present its quarterly review of the monetary policy on October 29.