India urges China to broaden banking ties

Its aim is to reduce financial barriers in order to create a more conducive environment for companies.

India has called on China to expand banking links between both countries and to enhance licensing procedures. Minister of State for Finance Namo Narain Meena, urged Chinese regulators to help enable the 10 Indian banks that currently have a presence in the country to open branch operations.

“Foreign bank licensing policy is gradual in China, and all these banks are at various stages of establishing their operations,” he said. “It is hoped that other Indian banks that have fulfilled conditions set for foreign banks in mainland China also graduate to opening branch operations at an early date.”

Meena was in Tianjin a day ago to open the State Bank of India’s second branch in China. SBI is the only Indian bank that has more than one branch in China. SBI Managing Director Hemant Contractor said the success achieved at the Shanghai branch has encouraged SBI to strengthen its presence in China by upgrading its representative office in Tianjin to a branch.

“The bank works with around 90 Indian companies which trade with China and around 200 Chinese companies.” The Tianjin branch will focus on assisting small and medium companies located in northern China and try to facilitate bilateral trade finance, Contractor said.

The Industrial and Commercial Bank of China is the only Chinese bank with a branch in India. Banks in both countries have expressed some frustration at the challenging licensing procedures on both sides of the border.