Mumbai: Swiss lender Credit Suisse Group AG said on Monday that it has received an in-principle approval from the Reserve Bank of India (RBI) to open a branch in Mumbai, which would allow it to expand services in India.
“Credit Suisse views India as a key strategic growth market for the bank globally,” Kai Nargolwala, chief executive officer of Credit Suisse Asia Pacific, said in a statement.
The Mumbai bank branch will allow Credit Suisse to accept deposits, complementing its non banking finance company (NBFC) in India.
Credit Suisse had acquired an NBFC in 2008, into which it infused $203 million in January 2009. The bank has also been active in private equity in India, investing around $240 million through different funds.
The branch licence will also permit Credit Suisse to deal in Indian government securities, other domestic fixed income products and foreign exchange. At present, Credit Suisse holds a merchant banking licence for investment banking and a portfolio management licence for its wealth management business.
The approval is part of a clutch of recent ones RBI has given to foreign banks to start India operations. These include UBS AG, First Rand Bank, Commonwealth Bank of Australia, and Australia and New Zealand Banking Group Ltd.
Under a comprehensive economic cooperation agreement with Singapore, the central bank also issued a licence to United Overseas Bank Ltd of Singapore to set up shop in India. DBS Bank Ltd, Singapore’s largest bank by assets, also got RBI’s nod to open eight new branches across India, up from two.
US-based bank Goldman Sachs Group Inc., which has an investment banking unit in India, is also awaiting approval for a commercial banking licence.
Most foreign banks are looking to scale up their presence in India, while existing lenders strengthen theirs through investments and fresh hires, betting on the potential of an economy that has the second fastest growth rate among major economies as firms expand and consumers take on loans to buy homes and automobiles.
State-run banks account for about 70% of India’s banking sector.
Some foreign banks are also hiring local talent to help them capture market share. Bank of America-Merrill Lynch recently hired Kaku Nakhate, vice-chairman of JPMorgan Chase and Co.’s Indian unit to replace Kevan Watts as head of operations in India.
P.J. Nayak, former chairman and managing director of Axis Bank Ltd, has been picked as chief executive officer of Morgan Stanley India to scale up its business in India, while Citigroup on Monday said it would replace outgoing Mark Robinson with Pramit Jhaveri to head its India operations.