That is the assurance given to Minister Mentor Lee Kuan Yew by Indian Prime Minister Manmohan Singh.

'There are some difficulties over conditions placed by the Reserve Bank of India (RBI),' Mr Lee told Singapore journalists at the end of his trip to India.

'I raised the matter with Prime Minister Singh and he said India will stick to the provisions in Ceca.'

Ceca (Comprehensive Economic Cooperation Agreement) was a landmark accord Singapore and India signed in June 2005. Covering trade, investment, taxation and banking, it gave special rights for Singapore banks to open as many as 15 branches across India in the first three years since coming into force.

In turn, Singapore would give three Indian banks qualifying full banking (QFB) status, subject to their meeting local regulatory benchmarks.

However, the issue has led to some complications.

The RBI, which has its own roadmap for allowing in foreign banks, has dragged its feet on allowing Singapore banks faster entry into the Indian market.

In Singapore, applications for QFB status from State Bank of India, the largest commercial bank, and No. 1 private lender ICICI Bank have yet to win approval.

Last month, after two years of wrangling over the issue, RBI wrote to DBS Group offering to give it eight additional branch licences provided it opened half the branches in rural areas.

It did not say if all eight branches would be granted at once, or in a phased manner.

In addition to DBS, Singapore's United Overseas Bank is also interested in opening a branch in Mumbai.

Mr Lee noted that more than 2,600 Indian companies had set up operations in Singapore, and more than 20,000 Indian professionals had set up home on the island.

Indeed, two of the top Indian schools are now present in the Republic.

All this required strong banking connections between Singapore and India, said Mr Lee.

'We want to serve the Singaporeans who come here and Indians who do business in Singapore,' he said.

Senior banking sources noted that despite PM Singh's assurance, the issue may not be easy to resolve.

'The RBI is an independent-minded regulator and has proved to be so in the past,' said a senior banker with close knowledge of the negotiations.

'Besides, there seems to be an amount of suspicion between the two central banks that doesn't go away.'

RAVI VELLOOR