State Bank of India's branch here has broken even in just second year of its operations, defying speculations by some analysts who saw it as an unwise move to open a branch at a time when other foreign banks were shutting down their offices in the country.
SBI became the first bank to open a branch in the Israeli diamond exchange in June 2007 to encash on the burgeoning Indo-Israel trade.
Sources at Bank of Israel confirmed SBI's remarkable progress, and also executives of other Israeli companies working with the Indian bank.
"After fulfilling all obligations and paying desirable taxes to the authorities concerned, the Indian bank still seems to have made an incredible progress by registering some profits during its early years of operations.
"It has set an example for other foreign banks to follow," a senior executive of a leading Israeli company doing business with India said.
Outgoing CEO of SBI, V Sashikala, speaking to PTI did not comment on this but said that "the bank has managed to successfully prepare its client base across various sectors and as per its strategy made sure that there is no overwhelming reliance on one particular sector".
Indo-Israel trade has been diversifying over the years and even though trade in diamonds still constitute some 50 per cent of the bilateral trade, other sectors have picked up in a big way. The bilateral trade figures between the two countries continue to increase registering $4 billion in 2008 and is projected to reach $5 billion this year.
"None of the sectors can claim a share of more than 20 per cent in our portfolio", Sashikala said.
SBI became the first bank to open a branch in the Israeli diamond exchange in June 2007 to encash on the burgeoning Indo-Israel trade.
Given that the significant portion of bilateral trade between the two countries was in diamonds, SBI's Chairman, O P Bhatt, during the inauguration ceremony had said that the bank had operations in all the major diamond trading centres of the world and Tel Aviv completed the loop.
With India and Israel discussing a Free Trade Agreement (FTA), bilateral trade is likely to get a new push which will enhance the scope for the Indian bank's presence in the Jewish state.
