As a long-term strategy for India, Scotiabank will also enter the mutual fund business.

"We have plans to start a housing finance by this year. The bank would also enter the mutual fund business by opening an asset management company (AMC)," Frank G Touchie, managing director of Scotia Finance, an NBFC arm of Scotiabank said.

He said that the bank would also increase its branch network in the country by opening four more offices by next year. Currently, Scotiabank has offices in Delhi, Mumbai, Coimbatore and Bangalore.

Touchie said the bank has received a licence from the Reserve Bank of India (RBI) to open a full-service branch in Hyderabad, which is expected to begin operations by the end of 1999.

Touchie said the NBFC arm would mainly focus on carfinance, medical equipment finance, besides the normal hire purchase and leasing business.

Scotiafinance will ultimately offer the full range of retail services permitted by the Government, including term deposits, Touchie said.

For growth in the NBFC sector, Scotiafinance is also looking at acqusitions in India on a selective basis.

"We are looking at acquisitions on a selective basis in India," Scotiabank's senior vice-president, south Asia, Doug Stewart said.

Having a capital of $6.7 million, Scotiabank holds 75 per cent in Scotiafinance while the remaining 25 per cent is owned by Ardee Finvest Pvt Ltd a Delhi-based firm in the commercial and residential real estate business.

Scotiabank, having assets worth $221 billion worldwide, is also an authorised bullion trader in India.

Stewart said the bank is aiming to become a major player to offer all kinds of retail business in india including the credit card business.

"The current year the growth in assets were quite good. We hope to double ournon-interest income and profits next year," he added.