$40m shot for BankAm arm

Bank of America (BankAm) has pumped in $40 million into its 100 per cent subsidiary "" Banc of America Securities.

The US-based bank has also injected $100 million into its banking operations in the country. Banc of America Securities is a primary market dealer and is into government securities trading.

With the infusion of $40 million, the total capital base of the company is now at $51 million. The initial investment of $11 million was bought in 2001.

"We have bought in $100 million as Tier II capital to stay relevant to our large clients in term of exposure limits and not allow that position to be eroded We clearly want to grow with key companies," said Edward J Brown III, president global corporate and investment banking, BankAm.

"Its not just a matter of providing them with more and more capital but using at capital as a corner stone of business and then providing them with many other services that we have to take care of the full range of our clients capital raising needs. That's when you truly have we have the model of corporate and investment bank working," Brown III added.

According to BankAm's managing director and CEO (India) Vishwavir Ahuja, the capital was brought in response to the revised RBI capital guidelines and exposure limits.

"While some banks have been protesting (the RBI move), we simply did what was necessary," he said.

He added that the bank did not have to cut exposure to any of the clients on the back of the new RBI guidelines. The bank now has a capital of around $235 million after this capital infusion.

"One of the great things that we have been able to do here is truly establish relationships as opposed to just selling financial products which is a key in how we do business globally. We are looking at how can we bring value to Indian companies which are becoming global as well as multinational companies which have chosen to have significant presence in India . I want to take a look at the value proposition not from the standpoint of India but taking our global capabilities," said Brown.

He felt that the Indian capital markets are poised for a period of great expansion. "It is a clear sign that Indian economy is clearly undergoing a dramatic changes and as we see expansion occur will see opportunities for ourselves in the areas of market based business," he pointed out.

On the products that could be bought into the country Brown III said, "The key products that we have looked at are derivatives market, asset backed securitisation and will also take a look at fixed income market when the market opens up."