The present paper discusses in details the historical background and inception of Foreign Banks in India and also the evolution of the Regulatory Framework of Foreign in India. The development of Regulatory Framework of Foreign Banks in India could be broadly divided into 3 Phases. The paper discusses in great detail about the Banking Reforms in India and also how Reserve Bank of India regulates the entry and functioning of Foreign Banks in India. The paper also elaborates about the modes of existence of Foreign Banks in India and the procedure for opening and operating of Foreign Banks in a particular mode in India. The Paper discusses what are the reasons for limited presence of Foreign Banks in India and what factors are discouraging Foreign Banks from entering Indian Banking Sector. The Paper also discuss the regulatory compliance which Foreign Banks have to comply for operating in India and also how emergence of Foreign Bank has led to improvised customer services, competitive efficiency, provided cheaper banking services and better banking products in India.