Enough space for China banks to complement India story: Chanda Kochhar

As it scales up presence in China, India's top private sector lender ICICI Bank today said there is also enough space for Chinese banks to play a complementing role in the Indian growth story.

Ruling out any threat from Chinese banks for the Indian banking sector, ICICI Bank's chief Chanda Kochhar said that India's growth is largely reliant on bank funding at present and "there are enough opportunities" for everyone to participate in the growth process of the nation.

Kochhar, who was here for the opening of ICICI Bank's first branch in China yesterday, also said that the bank's further expansion in this country would depend on the opportunities and growth it sees here.

"We will focus on Indian corporates doing business in China and the Chinese companies looking to invest and trade with India and other regions where ICICI Bank is present. Further, we also look to cater to the banking needs of the Indian diaspora residing in China," Kochhar told PTI in an interview.

A large number of Indian companies have taken loans from Chinese lenders in the recent months to refinance their high-cost loans.

On whether there is any threat to the Indian banks from Chinese peers given their competitive rates, Kochhar said: "Several foreign banks including Chinese banks have a presence in the Indian banking sector and at the same time Indian banks also operate in foreign markets.

"Considering that India's growth is largely reliant on bank funding at present, there are immense opportunities to participate in the growth process of the nation, and Chinese banks can have a complementing role," she said.

Assets of foreign banks are a relatively small proportion of banking system credit in India, Kochhar said, adding that the favourable demographic profile and growing affluence reflect significant prospects in retail lending, infrastructure and manufacturing sectors.

On ICICI Bank's plans and target customer base for the new Chinese branch, Kochhar said the bank's international strategy is focused on India-linked opportunities.

Based in Shanghai, China's biggest city and a global financial hub, the branch was inaugurated by Prime Minister Narendra Modi on the last day of his three-day China visit. The branch would begin with 17 banking professionals for corporate banking, operations, finance and treasury.

With a consolidated asset base of US $132 billion, ICICI Bank is India's largest private sector bank and it is present across 17 countries. It already had a representative office in China, which it had opened over 10 years ago in 2003.

The bank has upgraded its Shanghai representative office to a branch on rising trade volumes between India and China.

Explaining the bank's India-linked global strategy, Kochhar said, "We offer globally-benchmarked products and services with an extensive distribution network in India to gain competitive advantage.

ICICI Bank leverages its technology capabilities to offer convenience and efficient services to both domestic and international customers.

"In this context, having a branch presence will strengthen our participation in the growing economic relations between India and China.

"We will continue to focus on Indian corporates doing business in China and Chinese companies looking to invest and trade with India and other regions where the Bank is present. Further, we also look to cater to the banking needs of the Indian diaspora residing in China."

When asked whether the bank would consider expanding its presence further with more branches in China, Kochhar said, "Further expansion would depend on the opportunities and growth we see going forward."

On tie-ups with Chinese banks and other financial institutions, Kochhar said, "ICICI Bank already has tie-ups with Chinese banks through correspondent banking relationships to meet the trade finance requirements of Indian companies.

"We have relationships with several banks in China. The Bank already had a representative office in Shanghai and a branch in Hong Kong to cater to business in the region.

"With India-China economic relations expected to grow further, having a branch presence within China will help in facilitating business and trade ties between the two nations. The new branch will help us scale up our business linked to China."

Kochhar said she foresees a heightened amount of bilateral activity taking place between the two countries in the near future and ICICI Bank is strategically poised to take advantage of the increased opportunities.

Besides normal banking activities permitted under the guidelines of the China Banking Regulatory Commission, the Shanghai branch would also facilitate international trade between China and other countries and support Chinese firms and contractors bidding for infrastructure projects and funding requirements in India.

It will also help in business expansion of Indian joint ventures and subsidiaries of Indian entities in China and on remittances from China to India.

Some public sector banks including SBI, UCO Bank, Canara Bank and Allahabad Bank have also expanded presence in China in the recent years to tap into the growing trade flows between the two countries.

ICICI Bank's global footprint consists of subsidiaries in the UK and Canada, branches in the US, China, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre, and representative offices in UAE, Bangladesh, Malaysia and Indonesia. The bank's UK subsidiary has established branches in Belgium and Germany.

Its shares are listed in India on BSE and NSE, while its American Depositary Receipts are listed on the New York Stock Exchange (NYSE).