French banking giant BNP Paribas plans to set up a non-banking financial company (NBFC) in the country and will soon apply to the Reserve Bank for India (RBI), according to a senior executive.
The NBFC subsidiary will focus on services that regulations forbid the bank from providing. These include portfolio management activities, fixed income and equity derivatives to sell structured products and corporate finance activities, according to Jacques Michel, chief executive officer and country manager, BNP Paribas India.
However, Michel declined to specify when would the group apply.
At present, the bank has eight branches in the country which focus on corporate and investment banking and investment solutions. In addition, it has a 26 per cent stake in life insurer SBI Life and a retail broking venture with the Geojit group, besides its other joint ventures. It recently exited its mutual fund venture with the Sundaram group following its acquisition of Fortis Investments. Indian regulations forbid a player from being present in two asset management joint ventures.
“We have no intention of stepping up branch banking or deposit-taking activity. Given the number of branches we have, it will be impossible to tap a market the size of India. So, we intend to focus on the businesses we already have a presence in,” said Baudouin Prot, chief executive officer, BNP Paribas.
The bank has 320 employees in India. The country contributes one per cent to the group’s revenues. Geojit BNP Paribas, the retail broking joint venture, is keen on developing the internet business and growing significantly in North and West India.k