British bank Barclays Plc could jump into the league of top three foreign banks in India from 13 at present if it succeeds in merging its Dutch rival ABN Amro with itself in a deal that could create a combined entity worth $160 billion.

The two banks on Tuesday confirmed they are in 'exclusive' talks for a potential merger of worldwide businesses. If the deal fructifies, the combined entity would be the world's fourth and UK's second biggest banking group with close to 50 million customers and 2,25,000 employees worldwide.

Besides, it would cement their position against other leading foreign banks such as Citigroup, HSBC and Standard Chartered in India. ABN Amro is currently the fourth biggest overseas bank in India, while Barclays is the 13th largest.

The deal could also play a significant role in the emergence as full-fledged banking entities of both Barclays and ABN Amro -- which was known as a diamond financing bank for many years after coming to the country about 80 years ago.

While ABN Amro has expanded its presence considerably in segments like retail banking, loans and credit cards with about 28 banking branches, Barclays is lagging behind most of its overseas peers and its presence has remained somewhat limited to the investment banking segment.

Industry observers say ABN's India assets could be an attractive target for an overseas bank looking to expand here, given the regulatory hurdles for opening new branches.

ABN Amro's Indian assets are estimated to be over Rs 23,000 crore (Rs 230 billion) with a deposit base of about Rs 12,000 crore (Rs 120 billion).

The Dutch bank has witnessed strong growth in retail banking and credit card business in India in the recent past and these are the two high-potential businesses.