Bank of America, which launched its retail banking operations in India four years back, is on the verge of launching a credit card scheme in India within the next 12 months.
This was disclosed by BankAm's senior vice president, Anuroop (Tony) Singh, who announced the extension of the bank's banking hours to 20:00 hrs in Calcutta.
Singh said the bank will be looking for possible Indian partners for marketing alliances.
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"While expertise and funding will not be a problem for us, we will need assistance in distribution and will go in for co-branded cards," he said.
However, this will not be a joint venture, he added. The endeavour to tap Indian outfits will begin only as the launch date approaches, said Singh.
Also on the cards, is a plan to enter the housing finance sector after the credit card operations commence. The bank will enter this realm selectively, he said.
Moreover, the bank which has four branches in the country -- at Mumbai, New Delhi, Calcutta and Chennai -- is currently concentrating on non-branch delivery channels. It has outlined plans to invest an estimated $10 million for these activities.
"We are currently grappling with the hiccups related to infrastructure, especially in the field of telecommunication as most of our activities pertain to telephone banking and automated voice response unit", said Singh.
The bank has already obtained a licence from the Reserve Bank of India (RBI) to open a branch at Hyderabad.
The feasibility assessment is currently going on. The aim is to make a presence in top 10 Indian cities, eventually, said Singh.
The bank has an application pending with the West Bengal state government for the past two years for permission to set up a 365 days banking service in the city.
It has also made a couple of representations to the government for speedy clearance.
Calcutta is the only metro where banking hours have been extended till 20:00. In other Indian cities, the bank closes at 19:00 hrs.
"Once we obtain permission for 365 days banking in Calcutta we propose to extend banking hours in all other Indian cities till 20:00hrs," said Singh.
... inks pact with local firm
The Bank of America has signed a memorandum of understanding with an Indian outfit (which the bank refused to name) for incorporation of a subsidiary to carry out investment and merchant banking activities in the country.
The subsidiary, registered under the name B A Securities India (Pvt) Ltd, will carry out merchant banking activities, including organisation, distribution and trading in corporate debt securities. It is slated to be operational in the next fiscal.
The project has already obtained clearance from the Foreign Investment Promotion Board and BankAm will hold 75 per cent stake in the company.
The incorporation of such a subsidiary has been sought in order to adhere to the Glass Steagal Act in the United States which calls for a clear bifurcation between commercial banking (lending activities) and investment banking activities.
Sources feel that the bank may not have forged any linkages with financial institutions as they already have their own investment banking outfits.
It is felt that the bank may be negotiating with non-banking finance companies (NBFCs) as commercial banks in India are permitted to go in for investment banking in a restricted manner.