The first Russian subsidiary of an Indian bank could be operational in six months, indicated Alexander Vladimirovich Tourbanov, deputy chairman of the Russian central bank.
In an informal chat with Business Standard, Tourbanov pointed out that the State Bank of India (SBI) had filed an application in March, 1998, to open a subsidiary in Russia.
He said, There are no obstructions to the opening of the SBI subsidiary in Russia. We have studied the application and there are some technical remarks on the nature of documents. But these are not serious problems and can be sorted out, he said.
More From This Section
We normally provide the licence in six months and then it is up to the State Bank of India (SBI) to decide when to begin operations, he said.
SBI has joined hands with Exim Bank of India and MMTC to set up a bank in Russia. There are 147 banks in Russia with some degree of foreign investment, 16 of them are fully owned and 27 have more than 50 per cent foreign capital in the ventures.
Tourbanov also said that an early settlement to the issue of Indias debt to Russia would benefit both the countries.
Indias debt commitment to Russia reduced dramatically after the rouble drastically depreciated against the rupee following the collapse of the Soviet Union.
He said there had been exchange of letters on the issue between the finance ministries and the two sides are working on a mutually acceptable settlement to the issue.
We have suggested to the Indian government that part of the debt could be invested in the form of capital in Russia, but the Indian government does not seem to be in favour of this. Such an investment in rupee would have been beneficial for both sides, Tourbanov said. He added that the Russian finance ministry is dealing with the issue.
Tourbanov said the Russian government is taking steps to firm up the rouble and the situation is stable at the moment.
The Russian central bank is also simplifying procedures to open rouble accounts in Russia for foreign traders.
Russia is at a stage of transition and there is rigid forex regulation at the moment. But Russia is opening up gradually and is trying to adopt the path of liberalising forex control, the central bank chief said.