Mumbai: Dutch bank ABN Amro Bank NV is in talks with the Reserve Bank of India (RBI) to re-enter India even as Royal Bank of Scotland Plc (RBS) is in the process of selling select Asian assets of ABN Amro that it had acquired in 2007.
The Dutch bank has approached the Indian banking regulator for a banking licence, according to a senior ABN Amro official who does not want to be identified as the process is still underway.
ABN Amro needs a banking licence as it is keen to retain its Rs3,000 crore diamonds and jewellery business.
Rebranding underway: ABN Amro has been operating in India since 1920, until it was bought by a consortium lead by RBS in 2007. Paul O’Driscoll / Bloomberg
“The bank is in dialogue with RBI and the regulator is very receptive to the idea. We are keen to continue with the diamond and jewellery business. We will also have trade finance and other banking activities,” said the official.
Mint could not independently verify the official’s claim with RBI.
An email query sent to ABN Amro Bank remained unanswered.
The diamonds and jewellery business of ABN Amro Holding NV’s Indian arm was transferred to RBS instead of Fortis, the European banking and insurance firm that joined RBS and Banco Santander in October 2007 to acquire ABN Amro.
The original deal envisaged Fortis acquiring the Dutch bank’s asset management and private banking businesses as well as its international diamonds and jewellery unit but the plan had to be changed in Indian context as Fortis did not have a banking licence in the country.
In the wake of the international financial crisis, Fortis has undergone a metamorphosis. Its Dutch banking and insurance activities, under Fortis Bank Nederland (Holding) NV, have been acquired by the local government for €16.8 billion (Rs1.1 trillion). French financial services conglomerate BNP Paribas and the Belgian government are expected to take over its other banking and insurance businesses.
The transaction has not yet been closed following a ruling of a Brussels court on 12 December 2008.
At present, though the ownership of the diamonds and jewellery business globally remains with the government of Netherlands, it is run by RBS. The Netherlands government now plans to float another bank, named ABN Amro, and till such time the new entity gets a banking licence, RBS will continue to run the diamonds and jewellery business.
The diamonds and jewellery business spans Belgium, the US, Hong Kong, Japan and India, offering services targeted at miners, dealers, manufacturers and retailers.
In India, this business is run by a 12-member team.
ABN Amro has been operating in India since 1920, until it was bought by a consortium lead by RBS in 2007. It has 31 branches and about 10,000 employees in India.
ABN Amro’s banking business which has been acquired by RBS globally has not yet been rebranded in India. Though the assets are owned by RBS the bank still operates under the name ABN Amro Bank.
Currently, the bank is working with the regulators to rebrand its business under the RBS name. Local bankers are keeping a close watch on the development as they are curious as to whether RBI will give a new banking licence to ABN Amro while an entity under the same name continues to operate here.
In a related development, RBS chief executive Stephen Hester is on his maiden visit to India for a business review. The visit assumes significance as it comes after the bank closed the data room to bidders seeking to acquire the Asia retail and commercial banking business.
Data room refers to the process wherein the books of the bank are kept open for bidders to conduct due diligence. During the process, the bidders have the right to ask for more information.
Following the due diligence both Standard Chartered Bank and Hongkong and Shanghai Banking Corp. Ltd (HSBC) decided against bidding for the assets of RBS. The British bank now seems to have found favour with only Australia and New Zealand Banking Group Ltd (ANZ).