Bank of India and Export Import Bank of India (Exim Bank) plan to establish presence in Myanmar through branches and representative offices, to push Indian investments and support growth in bilateral trade.
This plan follows Prime Minister Manmohan Singh’s visit to Myanmar from May 27 to 29.
Bank of India, a Mumbai-based public sector lender, plans to set up a branch in the neighbouring country. Senior BOI officials said this is a part of its efforts to expand presence in the East and far East Asia. It already has branchessubsidiaries in Singapore, Cambodia and Vietnam and Indonesia, countries which are members of the Association of Southeast Asian Nations (Asean). Myanmar is a member of this group.
The bank would approach Reserve Bank of India and later the regulator in Myanmar for approvals, the official said. However, he declined to give a time frame for the plan.
During the prime minister’s visit, Exim Bank signed a pact with Myanmar Foreign Trade Bank (MFTB), for a line of credit worth $500 million. The credit line will be used for irrigation, rail transportation, electric power and other infrastructure development projects in Myanmar. The repayment period for credit under the proposed plans is 15 years, including a five-year moratorium. It may carry 1.75 per cent annual rate of interest.
An bank official said the proposed representative office in Myanmar would provide support to investments by India companies and also extend advisory services. However, it would not do banking business in that country.
Exim Bank, India’s export credit agency has already extended seven lines of credit, with an aggregate value of $247 million, to MFTB and total disbursements worth $123 million.
Kolkata-based, state-owned United Bank of India has established a representative office in Yangon (Myanmar) as the initial step to establish banking arrangements between India and the Asean member country. India has also offered to train Myanmar officials in the banking sector. Moreover, the Reserve Bank of India would sign a pact with the Central Bank of Myanmar on currency arrangements.
India has set a total bilateral trade target of $3 billion by 2015. It can import more agricultural produce, coal and minerals and export heavy industrial items, chemicals, pharmaceuticals and textiles.
