State Bank of India (SBI) customers in Singapore will not be able to use the largest local ATM network, which is managed by the three Singaporean banks?DBS, United Overseas Bank and OCBC.

Instead, they will have to depend on ?atm5?, which SBI has been allowed to join. This network was established in Singapore in April 2005 and currently operates at around 140 locations to serve customers of ABN Amro, BNP Paribas, HSBC, Maybank and StanChart.

This has happened despite SBI being allowed to set up retail shops in Singapore. The banking laws of Monetary Authority of Singapore has not permitted SBI from becoming a member of the local ATM network managed by the three Singapore banks. SBI is learnt to have taken up the issue with Reserve Bank of India informally.

The bank says it is necessary to be a member of the larger ATM network with over 1,500 terminals to reach out to its prospective customers, including a chunk of Indian diaspora.

As of now Citibank Singapore is the only bank of foreign origin that has been allowed by the local regulator to join the local banks? network (apart from atm5) in Singapore, as an exceptional case.

SBI, which recently got the nod to open up to 25 retail-cum-wholesale business branches and/or off-site ATMs in Singapore, is planning to open only five six branches in Singapore Analysts point out that foreign banks in India are not facing such restrictions in India and any foreign bank?s customer is allowed to use the ATM of the local banks by paying a small charge.

?On reciprocal basis, RBI too should disallow the Singapore headquartered banks, including DBS, to link with ATMs of Indian banks on a no-cost basis. RBI should revise the guidelines that allow account-holders of all the foreign banks operating in India to use the services of around 32,000 ATMs installed across India without any charge after April 1, 2009,? said an eminent banker.

JV partner remains a takeover target

Even as State Bank of India has entered into a memorandum of understanding with Insurance Australia Group (IAG) of Australia for its proposed expansion into the general insurance business, the joint venture partner has remained a take over target of another Australian insurance major,QBE. Meanwhile, QBE has said its proposal of 0.142 QBE shares and $0.70 cash per IAG share, to merge with IAG via scheme of arrangement, has been extended to May 19.