Mumbai: Standard Chartered Plc. is actively considering a proposal to locally incorporate its operations in India, according to Peter Sands, the newly appointed group chief executive.
“We have done this in China and may do in India, too,” Sands said, adding that a final decision has been made.
Local banking rules allow foreign bank s to operate in India as branches of their parent firms listed abroad or as locally incorporated subsidiaries. However, no foreign bank has yet taken the subsidiary route in India. StanChart also plans to offer private banking to its customers in India by the end of this year.
Even though it has 81 branches in India and is the largest foreign bank in the country, Sands said he thinks there is more room for StanChart to grow.
“There is more that we would like to do in terms of expanding branch network and offering more products, but we are not complaining where we are now,” he said. “In fact, having been present in India for more than 150 years now , we want to play a positive role in changing the regulatory environment.”
Foreign banks, led by StanChart, account for about 7% of the banking business in the country but the Indian banking regulator is planning to open the sector in 2009.
At the moment, no foreign bank is allowed to acquire more than 5% in any local bank unless it is ailing and needs to be rescued. Come 2009, foreign banks could see themselves having a significantly larger presence.
Citi, HSBC, ABN Amro, Bank of America and Deutsche are the other leading foreign banking players in India. StanChart overtook Citi to become the largest foreign bank in India five years ago, after it acquired the Indian assets of Grindlays.
StanChart has 14,000 employees in India — the most in any geography, including its home country.
Despite exiting the mutual funds business here, India is core to StanChart’ s global strategy and will continue to attract significant investment from the parent, said Sands.
“I believe that banking is not a 100 -metres race. It’s a marathon, and our commitment to India continues,especially at a time when Indian companies are harbouring ambitions of making cross border acquisitions,” he added.
India is currently the third largest single market for StanChart. “We already have commitments of close to $10 billion for India and we now feel that setting country limits for India is meaningless. Indian operations account for 10% of our global business and we will be looking at increasing this share even further,” the CEO said.
Commenting on the recent wave of acquisitions by Indian companies in overseas markets, including Tata Steel’s bid for Corus, Sands said that such activity is “not a pinnacle of a summit, but only a base camp. It’s not only big companies like the Tatas but small and medium companies who want to expand operations.”
Sands’ notes that his association with Mumbai goes back a long way—his mother was born and raised here.
Speaking to a group of journalists here, Sands held forth on how actress Shilpa Shetty was treated on a British television show, Big Brother. “A lot of people who did not watch Big Brother called up to support Shilpa Shetty because they were appalled with the treatment meted out to her because of her skin colour. I know my wife did!!” he said.