Punjab National Bank (PNB), the second largest government-owned bank in India, opened a representative office in the heart of the central business district here on Thursday, becoming the fourth Indian bank to establish a presence in Australia.
“We are hoping to get regulatory approval from authorities in both countries to upgrade this representative office into a full-fledged branch within a year,” said chairman and managing director K R Kamath.
PNB, established in Lahore in 1895 and taken under government ownership in 1969, joins State Bank of India (SBI), Bank of Baroda and Union Bank of India in Sydney, which is fast becoming a leading financial services hub in the Asia-Pacific.
Said New South Wales state premier, Barry O’Farrell: “The presence of PNB here will further cement the important business relationship our state has with India.”
India-Australia trade is now around A$23 billion (Rs 1.1 lakh crore). In 2009-10, this country exported A$19.8 bn of goods and services to India, making it Australia’s third largest export market. Australian merchandise exports to India reached A$18.3 bn in 2010, making it Australia’s fourth largest merchandise export market and fifth largest merchandise trading partner.
The two countries are hoping to double bilateral trade to A$40 bn within the next five years, which augurs well for more Indian banks to operate in Australia.
Australian Prudential Regulation Authority chairman, John Laker, told this correspondent, “The arrival of one of India’s oldest and largest banks in Australia is testament to the strength of the banking systems in both our countries and the opportunities for good banking business as economic linkages expand.”
The government of India owns about 58 per cent of PNB. The bank, through subsidiaries and joint ventures, has a presence in Britain, Norway, Hong Kong, Dubai, China, Nepal, Bhutan, Afghanistan and Kazakhstan.
It is in the process of upgrading its representative offices to branches in China and Norway, setting up a wholly owned subsidiary in Canada, and exploring possibilities for a presence in Maldives, Bangladesh, Brazil and Singapore.
SBI was the first Indian bank to open a representative office in Sydney, in 1998. It got the full wholesale banking licence in July 2007, opening the doors for corporate banking. Since then, the SBI Sydney balance sheet has been growing at a 53 per cent compounded annual rate and about 60 per cent net profit year on year growth.
“We are seriously looking at the feasibility of opening a subsidiary bank to cater to the needs of the retail market. We are hopeful this will come to fruition within two years.” said Salee Nair, SBI’s chief executive officer in Sydney.
The expatriate Indian community has welcomed more Indian banks setting up offices in Australia. Said the president of the United India Association, Amarinder Bajwa: “It is a very positive move, which would bring more personalised services to the growing Indian diaspora and businesses here.”
Australia’s major banks, the Commonwealth Bank of Australia and ANZ Bank, have obtained a banking licence and set up a branch each in Mumbai. National Australia Bank and Westpac have a representative office each in India.
