3 S'pore banks get nod to set up WoS

India will allow three major Singapore banks to set-up wholly-owned subsidiaries (WoS) in the country to boost investments as part of the bilateral comprehensive economic co-operation agreement cleared by the cabinet today.

The three banks - DBS Holdings, Overseas Chinese Banking Corporation and United Overseas Bank - will be given national treatment at par with Indian banks with regard to branches, places of operation and prudential requirements, commerce minister Kamal Nath said after the cabinet meeting.

Indian banks already operating in Singapore will qualify for national treatment there, which means they will be allowed electronic fund transfer and clearance besides use of local ATMs, he said.

Giving details of the deal, which will be formally signed during the visit of the prime minister of Singapore on June 29, Nath said the two countries will totally eliminate customs duties on 506 items from August 1 this year as part of the early harvest programme.

To boost foreign investments, the agreement has weaved in a double taxation avoidance agreement on the lines of the one with Mauritius with additional safeguards like sharing of information to prevent misuse.