"Our business is growing and we expect to increase our resources in Australia to $50 million by March 31, 2010, subject to the approval by the Reserve Bank of India," State Bank of India chief executive officer-Australia (Sydney branch) S Salee told FE.
According to Salee, an Indian bank in Australia needs to get a licence for becoming a subsidiary bank and there is a minimum requirement of $50 million to get into retail operations in the country. "The bank has not yet taken any decision of getting into retail banking and would continue our wholesale operations for another year-and-a-half," Salee said, adding that the increase in resource limit will help us to transform into retail bank at any time later.
The State Bank of India opened a representative office in Sydney in 1998 and it was transformed into a full fledged branch in April 2004. The branch, which is regulated by RBI and the Australian Prudential Regulation Authority, is helping Indian corporates to access the financial market in Australia.
Meanwhile, the list of Indian banks setting up bases in Australia is growing with Union Bank of India opening up its representative office in Sydney and if industry players are to be believed Punjab National Bank is also in the process of approaching the Australian Prudential Regulation Authority to set up operations in Australia. Once approved, PNB would be the fourth bank to operate in India after SBI, Bank of Baroda and Union Bank of India.
"PNB has shown some interest and the talks are in progress after the bank's chief met the officials in Australia," Peter Linford, senior trade commissioner (south Asia), Australian Trade Commission said.
The increasing activity by Indian banks comes a year after the world's largest bank, the Industrial and Commercial Bank of China, was granted a branch licence by the Australian regulator.
Even Australia's four major banks ANZ, NAB, Commonwealth and Westpac are all in various stages of processing applications for entering the Indian banking sector, in light of the proposed FTA between the two countries.