At a time when foreign banks are exiting India, Qatar’s largest private commercial bank, Doha Bank, will be opening its first branch in Mumbai next month and has proposed to expand its exposure to India from the current level of $1 billion to $5 billion over the next three years.
“We want to build $5 billion assets in three years,” said R Seetharaman, Group CEO. “We have received the Reserve Bank of India licence to set up operations in India and we have taken the branch route to enter India.” When asked about whether he is ready to get the bank incorporated as a local subsidiary once operations reach a critical scale, he answered in the affirmative, saying: “We have no issues with RBI norms of becoming a wholly-owned subsidiary.”
American bank Morgan Stanley surrendered its licence last year as did Swiss bank UBS AG in the wake of stringent rules and capital norms. HSBC had shut its retail broking and depository services last year. In recent years, Barclays exited retail banking in India and Royal Bank of Scotland sold its Indian credit cards, mortgage and commercial banking portfolios. Under RBI rules, foreign banks which convert their local operations from a branch structure to being subsidiaries will be treated on nearly equal terms with local banks.
Seetharaman said they moved the application way back in 2005 and only after Qatar allowed the SBI to open its branch last year did India give the nod. “So our licence came this year as a reciprocal gesture,” he said.
“We will be operating as a Gulf bank functioning in India and will be promoting bilateral trade, investments and finance,” said Seetharaman.