Subsidiary route: HSBC says ready to follow RBI norms
British banking major HSBC is willing to take whichever route the Reserve Bank prescribes for it to operate in the country, including going the subsidiary way, a top official has said.
“We will move whichever way the RBI requires us to do,” HSBC India country head Naina Lal Kidwai told PTI on the sidelines of an event here, when asked if the bank will be fine with going the subsidiary way.
The comments come in the wake of recent reports that RBI had firmed up its mind on the way forward for foreign banks and would be insisting on them to operate as subsidiaries.
A formal announcement from the RBI is likely soon as it has already come out with the final guidelines on new private banks. Experts say this will help ring-fence operations here by insulating them from the risks taken by their parents in other home markets or elsewhere.
The prospect of an increase in the regulatory gaze and stricter adherence to local laws creates some of the lenders uncomfortable to run as subsidiaries, according to experts.
On the taxation front, there are reports that the government has granted a one-time exemption if MNC banks convert their branch offices into local arms. In fact, tax benefit was one of the key demands that MNC banks were seeking for going the subsidiary way.
“The guidelines are there and its all being analysed and investigated,” Kidwai said.
HSBC India operates through 31 branches and its presence would have increased by around 24 branches had its deal to take over RBS’ retail business here fructified.
In July 2010, RBS had announced sale of its retail and commercial banking business in India, estimated to be worth $1.8 billion at that time, at a premium to rival British bank HSBC. The RBI has refused HSBC the permission to go ahead with the deal.
Post new comment