India and China Call for More Banking Presence in Each Other’s Countries
Dec. 17 – The China Banking Regulatory Commission and the Reserve Bank of India signed a memorandum of understanding (MoU) on December 16, the second day of Chinese Premier Wen Jiabao’s visit to India, in order to spur on more mutual banking presence as well as financial cooperation.
A joint statement was also issued after the talks between Premier Wen and Indian Prime Minister Manmohan Singh, saying the two countries have agreed to offer permission to the banks of the other country to open branches and representative offices (ROs).
The newly signed MoU is hoped to bring more branches and ROs of banks into the other country. Currently, several Indian banks including State Bank of India, Bank of India and Bank of Baroda have opened branches and ROs in China while there is no Chinese banking presence in India yet. According to a December 17 report on a popular Chinese news web site 21st Century Business Herald (21cbh), the Industrial and Commercial Bank of China has become the first Chinese bank that received the proper license from Indian government and is in active preparation for the openness of its first Indian branch in Mumbai.
Professor Srikanth Kondapalli of India’s Jawaharlal Nehru University said that there is some protectionism in India with regards to banking openness. However, India is modifying its strategy and finds the massive amount of China’s bank reserve very attractive.
Several other major financial institutions in the two countries have also signed agreements for cooperation and MoUs, according to a December 16 report on The Hindustan Times. The China Development Bank and India’s ICICI Bank signed a US$400 million facility agreement on December 15 while Bank of China concluded an MoU with the Industrial Development Bank of India.
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