The State Bank of India is looking at forming alliances with foreign banks, which do not have a presence in India.
Idea is to facilitate Japan Inc investments
MUMBAI: The State Bank of India is looking at forming alliances with foreign banks, which do not have a presence in India.
On Friday, India’s largest commercial bank announced that it had signed an exclusive agreement with Mizuho Financial Group, Japan’s second-largest bank by revenue, to help Japanese companies wanting to invest in India.
Speaking to DNA Money, State Bank of India managing director T S Bhattacharya said this was a first-of-its-kind exclusive bilateral tie-up for SBI.
“Japanese companies want a single transaction point in India. So if these companies are looking at financing acquisitions or a licence or a public issue we will help,” Bhattacharya said.
He said the alliance would help the Japanese group access the vast rupee base of the SBI.
But analysts say such tie-ups haven’t brought any big business opportunity for banks.
“It all looks good on paper, the largest Indian bank with the second largest Japanese bank, but the implementation has been poor so far because there is no preferred status for such foreign companies from Indian banks,” said a representative of a foreign bank in India.
SBI is planning to target small Japanese companies particularly in the manufacturing sector which want to invest in India.
“There are many such mid-size and small companies which are looking to invest. But we are open to such tie-ups with banks from other small countries also like Italy, England and Singapore, though we are in no talks with anyone yet. We will take it one at a time,” Bhattacharya said.
It is not new for Indian banks to get into tie-ups with foreign banks, SBI itself has a tie-up with other foreign banks as well.
Bankers are keeping figures crossed about Japanese investments particularly the huge interest shown for the proposed Delhi-Mumbai industrial corridor.
India and Japan signed a memorandum of understanding for construction of the proposed $90-billion Delhi-Mumbai industrial corridor in July last year.
r_joel@dnaindia.net
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