Bank of China has secured in-principle approval from the Reserve Bank of India (RBI), the central bank of the country, to set up branch in the country.

The move follows the decision taken by the Indian Prime Minister Narendra Modi and Chinese President Xi Jinping during the SCO summit last month to allow Bank of China to foray into India.

Currently, Industrial and Commercial Bank of China (ICBC) is the only other Chinese lender to operate in India with a single branch in the city of Mumbai.

Headquartered in the Chinese capital of Beijing, Bank of China was founded in 1912 and currently has a market capitalisation of around $158.6bn.

It has presence in more than 50 countries across the globe.

Most of the foreign banks in India operate by opening their own branches instead of creating a standalone subsidiary. However, all these lenders are encouraged by the central bank of the country to operate through wholly-owned subsidiaries.

Singapore-based DBS bank is the other major Asian bank expected to launch its Indian subsidiary later this year.