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The sub-prime crisis of 2007, led to a liquidity crunch mainly in the US and Europe. The shrinkage in liquidity and limited growth opportunities in the high-income markets was forcing banks to develop a growing and sustainable retail business. Meanwhile, the Indian banking sector too was witnessing a transition from class banking to mass banking with expansion of the middle class, requiring varying banking needs. Bank credit growth, changing consumer demographics, and large segments of untapped population were the prime reason for the attractiveness of the Indian retail banking sector. Anticipating growth opportunities in India, many MNCs (multinational corporations) like Credit Suisse concentrated on the Indian retail banking sector to grab a market share. But strict licensing policy by the Indian government towards foreign banks was a prime obstacle for MNC banks entering India. MNC banks faced several challenges including rudimentary infrastructure, dynamic political environment, restrictive regulations, and operational risks, which are characteristic of emerging economies that needed attention. Industry analysts pointed out that, Indians are getting direct access to resources from the global credit market through foreign banks, and regulatory vigilance could be a big mistake. In 2009, the RBI (Reserve Bank of India) was slated to liberalise the foreign banks' licensing policy. But it needs to be seen whether MNC banks will succeed in the Indian retail banking sector, or should they wait for a longer period of time?