DAVOS: JP Morgan Chase CEO Jamie Dimon on Friday made a strong pitch for his bank to be able to buy a large bank in India as he promised to ramp up exposure to the country by several billions of dollars.
India’s present rules do not permit a foreign bank to own more than 5% of a local bank, a level Dimon says is too little.
“That’s nothing for us. I want to buy a whole bank there. I would love to own a big bank there,” Dimon said in an interview on the sidelines of the World Economic Forum in Davos.
Foreign banks in India have mostly operated as branches of their parents, which has until now meant severe restrictions on how much they can expand in the country via new branches or offices. The Reserve Bank of India (RBI) last week dangled the carrot of a near level-playing field to foreign banks provided they set up wholly-owned subsidiaries. Using this route, global banks such as JP Morgan, Citi or HSBC would be allowed to set up branches at will in smaller cities, barring some security-sensitive regions, and list their shares on stock exchanges with at least 25% Indian holding, a discussion paper released by the central bank said.
Dimon said JP Morgan, the second-biggest US lender by assets and one of the few banks to emerge relatively unscathed by the financial crisis, had until now only grown organically in India and while it remained keen on using that route, it wanted a much larger presence.
“It would very hard for us to think that we can go there, open a few branches and hope to compete with some of your great companies. Our credit exposures to India run into billions... We would be willing to invest billions more if there was a logical acquisition and even more on top of that to grow other businesses. So you are talking about substantial sums of money,” he said.
Read on.
No comments:
Post a Comment