RBI approval follows Prime Minister Narendra Modi's commitment that India would expedite procedures to allow the BoC to set up branches in India.

The Reserve Bank of India (RBI), on Wednesday, issued a licence to the Bank of China (BoC), one of the four biggest state-owned commercial lenders in China, to operate in India, according to a media report.

Reserve Bank of India issues licence to Bank of China to operate in India.This was a commitment made by PM Modi to Chinese leadership: Sources — ANI (@ANI) July 4, 2018

The RBI approval follows Prime Minister Narendra Modi's commitment that India would expedite procedures to allow the BoC to set up branches in India. Security clearances for the bank were given earlier.

In early June, Modi and Chinese President Xi Jinping held talks on the sidelines of the Shanghai Cooperation Organisation (SCO) summit, in the Chinese port city of Qingdao. That meeting reportedly covered key aspects of bilateral engagement, reflecting a resolve by the two countries to reset relations and boost trust, which has taken a beating owing to several sticky issues, including last year's Doklam standoff.

According to News18, several foreign banks, including the Bank of China, have sought RBI’s permission to set up operations in India. Industrial & Commercial Bank of China Ltd (ICBC) already has operations in India along with 44 other foreign banks, according to the RBI.