Reciprocity is what the FM wants from the US. Chidambaram told the India-US CEOs' forum and the US Fed Reserve in a tough talking message that India will not clear any US bank branch license till the US gives a thumbs up to some of ours.

FM P Chidambaram told the US side that unless the US Federal Reserve grants permission to Indian banks like SBI and ICICI to open more branches, India will not entertain more applications from US banking majors like CITI.

Citibank had asked for permission to open 37 branches but the RBI has given clearance to only 3. Other banks like American Express Bank, Bank of America and JP Morgan Chase have also filed applications with RBI to open more branches in India but FM Chidambaram has indicated that the permission granted to Citibank may be the last unless more Indian banks are allowed to set up branches in the US.

Perhaps as a result of this tough talking, ICICI Bank's application for branch licence has just been cleared by the US authorities. Sources say that the US Fed Reserve is not too keen on granting branch licences to Indian banks because of what it says are weak regulations relating to money laundering. But the FM hit back saying India has already passed the anti money laundering bill in 2006.

For the record, 52 branches of US banks are operational in India while only 6 Indian bank branches function in the US. This issue is likely to generate a lot more heat with both sides digging in their heels.