Sources in the US government
have told that ICICI Bank and
State Bank of India (SBI) could
get clearance to open a US branch
within a month's time. The approval
process is reportedly in its
final stages and is awaiting
clearance from the US Federal
Reserve.
What has helped is the Reserve
Bank of India's decision to
grant three new branch licences
to American major Citibank in
India. After a long two-year
wait Indian authorities hope
that this will lead to reciprocal
action from the US in the form
of licences for some of India's
largest banks.
The US has been dithering on
licences for Indian banks for
years now. Their main contention
has been that India does not
have an adequately stringent
anti money laundering law to
prevent the misuse of US bank
branches.
NRI remittances
The approvals could not come
at a better time for both ICICI
and SBI. Indian banks have been
aggressively expanding abroad
in order to capture the lucrative
NRI remittances market.
NRI remittances touched $25
billion in 2006-2007 and are
growing at over 20 per cent
per year. Close to 40 per cent
of these remittances come from
the US making a key market for
anyone looking to tap the NRI
customer base.
"Our international strategy
continues to be linked to the
Indian consumer, corporate consumer
and retail consumer. Cross border
interactions are increasing
and that offers good growth
potential. We are currently
in 18 countries and we have
applied for licences in a few
more, the US is one of them
and we will wait for necessary
approvals," said Chanda
Kochhar, Deputy MD, ICICI Bank.
A branch licence in the US
is only a start. Both ICICI
and SBI are hoping that a full
service branch in the US will
give them a foothold and allow
them to eventually apply for
full subsidiaries in the US
Source: NDTV
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