MUMBAI: The State Bank of Mauritius (SBM) is awaiting the final go-ahead from the Reserve Bank of India (RBI) to merge its existing operations with the newly registered local SBM Bank (India) Ltd as it seeks to become the first foreign bank to incorporate a local subsidiary in the country.SBM Bank India plans to open six new branches to add to its four branches in India and start operations later this year. “We missed the shift from baby steps to giant strides between 1991 and 2016. India is now preparing to leapfrog from a giant stride and we do not want to miss this opportunity. Our growth has to come from outside Mauritius,” said Moses Harding John, CEO India and East Africa at SBM Holdings, the holding company for the India subsidiary.SBM is the second largest bank in Mauritius, which has a GDP of just about $13.34 billion and a growth rate of around 4% in an economy that does not leave much room for the lender to expand.“India is linked to Mauritius through an umbilical cord because 90% of the Mauritian population is of Indian origin. Our Indian subsidiary will complement our African units and help us to build scale and business,” said John.Earlier this year SBM concluded its purchase of Chase Bank in Kenya, which together with its Madagascar and Indian subsidiaries makes up the three banking arms for the bank outside its home market.The bank will have an 11-member local board in India including John, India CEO Siby Sebastian and former SBI executives Sudha Ravi and Sanjay Bhattacharyya. Five members will be from the parent company, in addition to two Indian members who are yet to receive the final approval from RBI.“The controls will be within India, which means we will have flexibility for all decisions including hiring. Local control will mean business will gain speed and will reflect in the enterprise value for the bank, like we are seeing in some Indian private sector banks,” said John.Mauritius is the biggest source for foreign portfolio investors (FPI) investing in India and John expects to take advantage of that link as well. “We can service FPI clients both from Mauritius and India. Initially we will look to service mid-market clients in India together with retail and business banking. We can also tap dollar liquidity from our subsidiaries abroad. We are in readiness to start operations in September and we do not think it should take more than three months for a final RBI nod,” said John.
from The Economic Times https://ift.tt/2OtpK6e
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