The continuing uprisings in Bahrain have tensed Indian banks too. Those banks which were in plans to expand themselves offshore to the island nation have decided to anchor their plans for now.

The country had come in the eyes of the banking community owing to the easier regulations followed as well as the comparatively low taxes levied.

Private sector lender, Yes Bank had also received approval from regulator Reserve Bank of India to set up a branch there. But after the recent uprisings, it has decided to hold back its plans.

"Given what has happened, we will most likely modify the application to mention some other geography. We are in the process of doing that," said Jaideep Iyer, deputy chief financial officer and president, financial management, YES Bank.

"Why did we choose Bahrain? The predominant criteria for any geography outside India are the ease of regulation, the ease of entry and the cost. Bahrain fits the bill," said YES Bank's Iyer.

Similarly, public sector lender, Canara Bank which had also received regulatory approvals in the same regard has decided to postpone its move.

"We are watching the situation," said S Raman, chairman and managing director, Canara Bank.