Over the past few years, the Indian banking sector has witnessed with the withdrawal of foreign commercial banks, due largely to the fact that growth did not meet the high expectations of foreign investors. However, on July 1st, multinational bank JPMorgan Chase & Co. (JPM  ) defied that trend in a major way, when the Reserve Bank of India (RBI) approved their plan to open up three new branches in the cities of New Delhi, Bangalore, and Chennai. These ventures, in addition to the already-existing JP Morgan branch in Mumbai, will allow the American company to optimize service and expand clientele, focusing in part on local Indian firms with strong international trade links. 

There are currently only 46 foreign commercial banks in operation in India, few of which have established noteable success. UBS Group AG (UBS  ), Morgan Stanley (MS  ), and Goldman Sachs (GS  ) are among the banks that recently pulled out of India--offering JP Morgan the perfect opportunity to enter the sector with little competition apart from Citigroup Inc. (C  ) and UK's Standard Chartered PLC (LON: STAN). Previously, restrictions on foreign commercial banks required companies to allocate part of their lending towards economically-weak borrowers, which many analyzed as a costly risk. However, the RBI has recently decided to allow banks to buy portfolios of these loans from rural-area, state-run banks, which will mitigate some of that risk for investors. All four of JP Morgan's banks will provide valuable services such as lending, cash management, trade financing, and foreign-currency payments once established. 

Indian clientele can look forward to an expansion of digital services, as the company aims to prioritize accessibility and efficiency in the realm of finance. JP Morgan's Global Market Strategist Ian Hui said on Wednesday that emerging markets such as India have recently outperformed developed markets, and the world can expect positive economic reforms to soon strengthen the Indian market as a whole. In time, we may see other foreign banks following suit, and once again pursuing opportunities for commercial bank licensing throughout the country.