Austria's central bank expects bilateral trade to grow by 5%

Even as business between Austria and India touched euro 500 million in the year 2004, a growth of 35 per cent over the previous year, Raiffeisen Landesbank Oberosterreich (RLB), the central bank of about 120 co-operative banks of Austria, aims to ride piggyback on this growing trade between India and Austria.

The Austria-based bank is seeking to strengthen its relationships with banks and financial institutions in India to enhance trade between the two countries and has also started its representative office in India. The Reserve Bank of India (RBI), in mid-April, gave a `no objection' for the appointment of Bhupendra Shah as consultant for RLB in India.

With the Austrian president's recent visit to India along with a 80-member trade delegation, business between the two countries is expected to grow at about 35 per cent this year too. About 10 to 15 per cent of the 500 million euro business garnered in 2004 was through the network of RLB.

"About 130 joint ventures have been signed betweeen the two countries and RLB aims at a larger share of revenue from confirming letters of credit (LCs) and providing finance against LCs. In fact, in 2004, RLB did a business of 8 million euros through tenders, bid bonds and such other papers," said Bhupendra Shah, who was in Ahmedabad to explore business opportunities in the city.

"RLB has correspondent banking relationships with about 20 nationalised and private banks in India, which bring in a business through the business of LCs, providing guarantee against counter guarantee and the like," Shah said.

Some of the banks with which RLB has correspondent banking relationships are State Bank of India, Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, OBC, ICICI Bank and UTI Bank.

"We are looking closely at power generation, steel plants, transportation, defence equipment, food processing and tourism sectors for business. We expect business from India to grow by at least five per cent over the previous year," Shah said.

Asked if RLB had any plans to start operations from India by opening up a branch in India, Shah said, "As of now, there are no plans as opening up of branches in India will harm the correspondent banking relationships. However, if there is sufficient captive business from India in the future, we could think in those terms."

Headquartered in Linz, RLB also functions as a commercial bank. With assets of over 14 billion euro at the end of the calendar year 2004, RLB is one of the biggest banks of Austria and figures among the top 350 banks of the world according to the Banker's Almanac.

RLB has 24 branches of its own in Austria along with a branch in Germany and an affiliate bank in the Czech Republic. Besides, the 120 co-operative banks of Hungary have another 400-odd branches, reaching out to a population of about 25 million in Austria, Germany and the Czech Republic.