State Bank of India (SBI) is eyeing international branch operations in China as trade between the two countries is on the rise.
SBI is meticulously looking at expanding its international presence across the globe. Its 60:40 joint venture with Canara Bank in Moscow -- called Commercial Bank of India -- will take off in the next couple of months. Its Sidney representative office will also be upgraded into a full-fledge branch shortly.
SBI deputy managing director & group executive A K Batra stated that the bank is looking at opening a branch in Shanghai and has started its leg work. "It will take time. We are looking at a timeframe of one and a half to two years. With the trade between the two countries only expected to increase further, we are seriously looking at expansion into Shanghai," said Batra, who heads international banking operations.
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The foreign offices of SBI have been faring well, having posted a record profit of Rs 248 crore, which accounted for 15 per cent of the bank's total net profit in the year 2000. SBI has a network of 52 overseas offices spread across 31 countries.
"We will grow where we see business growing. But we will be prudent and take care as we see the viability of operations in each centre," said Batra. Unlike its joint venture plans for Moscow, SBI intends to go alone in China. In most countries the bank has gone on its own.
"In the case of Moscow however, we found there to be an advantage in growing the business through networking with Canara, which is equally strong there," said Batra. Both the public sector banks have existing representative offices in Moscow. The joint venture, with an initial capital of $ 20 million, will also help mitigate risks and exposure of the bank, he added.
Commercial Bank of India will initially commence operations in wholesale banking and trade finance operations, and will examine retail banking operations at a later date.