The State Bank of India (SBI) has got the permission from the Chinese authorities to lend in the local currency, the yuan--becoming the first Indian bank to get such permission from the Communist country.
With this, the Indian companies operating in China, which borrow about 700 million renminbi or yuan could gain access to about a billion yuan, (about $200 million) from the SBI without depending on the local banks, SBI Chief Executive for China C R Sasikumar told PTI here from Shanghai. The permission is for SBI's Shanghai branch, he added.
"By virtue of doing business with top Indian businesses back home we know them very well. So from now SBI which is dealing in foreign currency only here, could give them credit in the local currency," he said.
SBI Deputy General Manager (Overseas Expansion and Planning) Naresh Malhotra told PTI in Mumbai that the bank expects to start lending in the yuan from March 15. "With this approval, our Chinese operations are getting into a different level as we were dealing in mainly the US dollar so far," Malhotra said.
With a view to support its growth in the region, SBI has so far invested around $45 million in China, Malhotra said.
Terming the permission as a major gesture from China, which is very cautious in allowing foreign banks, Sasikumar said the banks had applied for the permission last May.
