This article investigates to studying of causality relationship between FDI and banking industry in Asian countries. Panel unit root tests show that the variables are stationary at the first deference. Pedroni test indicates that there is the long run relationship between FDI and banking industry. The Hausman test shows that the fixed effects model should apply. 12 countries from Asian countries have been chosen over the period 1995-2009. The results show that there is a bidirectional relationship between these variables (the feedback relationship) in long run and short run. It means that FDI reinforce banking industry and banking industry attracts foreign direct investment. For FDI attraction governments should devote attention on banking industry.

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