Foreign banks looking to offer services to clients in Australia using locally based staff, but without the benefit of a full licence from APRA, received a cautionary letter from the regulator about the practice on Friday.The Australian Prudential Regulation Authority published the letter, from its head of policy, Charles Litrell, on its website.The letter suggests that APRA has no objection to foreign banks conducting business with their Australian counterparts from offshore offices, but said the banks must not maintain an office of permanent staff in Australia. Banks must also clearly conduct their business under the law of offshore jurisdictions.A second theme of the letter is to warn foreign banks registered as branches, but not subsidiaries, from seeking to circumvent the rules that limit the ability of banks to conduct retail business.Litrell wrote that the A$250,000 minimum in deposits also applies to securities, bonds, debentures and other structured investments. APRA said it will also look at the source of funds, for example, at liabilities raised through brokers or fund managers.