BBK wins approval to boost India operations
Manama, October 14, 2012
Bank of Bahrain and Kuwait (BBK) said it has become one of only eight foreign banks to be granted permission to expand in India by the country's central bank.
The Bahrain-based bank was among several international banks such as JPMorgan Chase, Morgan Stanley and Citibank to receive a licence.
The award of licence for BBK is significant as the Reserve Bank of India (RBI) grants only 12 licences every year, BBK India general manager and chief executive V Sankaran told the Gulf Daily News, our sister publication.
"Many new entrants in the international banking arena are vying with each other for a space in India," he said.
"Penetration of banks per citizen is still very low in India and hence a branch licence is important to a foreign bank in particular," he noted.
The recognition reflected BBK's growing presence in India, he added and was part of efforts to reach out to the large Indian expatriate community, which remits a significant volume of money to India annually.
The new branch will be set up at Aluva, on the outskirts of the fast developing south Indian city of Kochi in Kerala.
"The city is a major export hub and with good connectivity, we have the advantage of being in a major trade and commerce centre," he added.
"BBK would be the only Middle Eastern bank, which will have an active operation from Kerala. The bank's centres in Bahrain and Kuwait, which cater to a non-resident Indian population, will get a boost with the opening of the new branch."
BBK has entered into several partnerships, such as a joint venture with India-based share broking firm Geojit BNP Paribas to offer depository and mutual funds services to Indian expatriates, Sankaran said.
The bank has plans to expand further in India, with an approval for another branch, still pending.
"BBK proposes to further increase its presence in India and integrate this expansion more strategically within our operations," said Sankaran.
The fresh optimism comes after BBK had planned to exit India nearly seven years ago. "We have experienced difficulties in the past," he stated.
"Around 2004 and 2005, there was a plan to exit India. Due to our timely correction strategies, BBK's operations in India have made a turnaround since 2007 and we have seen our best performance on a continued basis thereafter," he observed.
According to him, the entry into the Indian banking sector still remained challenging, thanks to long delays for approvals. "It is very tough to get entry into the Indian market for any foreign bank," he remarked.
"We had approached the RBI for the licences in 2010 and got approval for once branch in 2012. "The process is generally elongated with various internal clearances and ministerial approvals required," he added.-TradeArabia News Service