PM Modi keeps his promise to China: RBI issues license to this 106 year old Chinese bank

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Published: July 4, 2018 2:47:09 PM

After opening its first branch in South Asia in Pakistan last year, the 106-year-old Bank of China (BoC) is all set to roll out its India operations.

India, china, bilateral trade, india china bilateral trade, Xi Jinping, PM Modi, SCo summit, Shanghai Cooperation Organisation summit, india newsEarlier in June this year, Prime Minister Narendra Modi had met Chinese premier Xi Jinping ahead of the Shanghai Cooperation Organization (SCO) Summit held in Qingdao, China. (PTI)

After opening its first branch in South Asia in Pakistan last year, the 106-year-old Bank of China (BoC) is all set to roll out its India operations. On Wednesday, the Reserve Bank of India issued license to the Chinese bank to launch its operations in the country, ANI reported citing unidentified sources. This decision was based on the commitment made by Prime Minister Narendra Modi to the Chinese leadership, ANI reported. After the reported approval by the banking regulator,  the 106-year-old Bank of China will open a branch in India.

Earlier in June this year, Prime Minister Narendra Modi had met Chinese premier Xi Jinping ahead of the Shanghai Cooperation Organization (SCO) Summit held in Qingdao, China. Both leaders discussed a variety of issues including security, economic cooperation and people-to-people exchanges.

Meanwhile, India’s newly-adopted Insolvency and Bankruptcy Code (IBC) has got international investors and lenders interested. Data compiled by Bloomberg show that Indian banks have raised 77 percent more in foreign-currency loans this year than in the same period of 2017 — and at razor-thin interest rates. As India is moving to fix the bad loan crisis in a timely manner, it will lead to cleaner balance sheets and stronger credit profiles, Moody’s said in a report.

“There is good demand for high-quality loans from Indian banks as the sovereign macro story remains strong,” Manmohan Singh, head of banking at the Indian unit of Bank of Nova Scotia told Bloomberg. “International investors and lenders are taking comfort from the Insolvency and Bankruptcy Code, which is working well.” About 40 accounts with big non-performing assets are in the pipeline for the insolvency process, and more are expected soon as the Reserve Bank of India (RBI) streamlined several NPA resolution schemes into a uniform and time-bound process in line with the IBC.

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