Rethinking Liberalisation of Banking Services under the India-EU Free Trade Agreement

By Kavaljit Singh and Myriam Vander Stichele | SOMO Paper | September 2009

The European Union (EU) and India are negotiating a free trade agreement (FTA) which encompasses liberalisation and deregulation of financial services. This paper wants
to raise policy issues that run much deeper than the current liberalisation debate and consider who will benefit and who will lose from the FTA. This paper first looks at the performance of EU banks in India, especially as compared to the developmental needs of the un-banked and under-banked regions and groups of people in India.

Since the financial crisis has highlighted the fact that liberalised and deregulated financial services have damaging effects on a country, this paper also analyses how free trade agreements potentially reinforce rather than mitigate those trends.