To cater to the growing trade with India
State Bank of India (SBI) will next month open its second branch in China in the north-eastern port city of Tianjin to cater to the growing trade with India, particularly from the northern part of the country.
While much of the annual $66 billion bilateral trade is driven by China’s more prosperous southern provinces, SBI officials believe the increasing trade from northern China — and particularly through the fast-developing trade hub of Tianjin — will provide a platform to grow the operations of the bank’s second China branch.
SBI is also considering opening a third office in the southern port city of Guangzhou.
SBI Shanghai, in 2010, became the first Indian bank to acquire a licence from Chinese authorities to do business in the local Renminbi (RMB) currency.
Dinesh Sharma, CEO of the SBI Shanghai Branch, said the Tianjin branch would open towards the end of February. Under Chinese rules, banks have to go through a five-year waiting period before they can acquire an RMB licence.
The Tianjin branch will open with $47 million capital. SBI Shanghai operates with $76 million capital, including 300 million RMB.
Mr. Sharma said SBI had, in the two years since it began dealing in RMB, expanded its business in China.
The bank initially mainly catered to Indian companies based in China. “We are also working with an increasing number of Chinese companies which export to India, and also Chinese power sector equipment manufacturers, for whom we issue guarantees for acceptance in India,” he said.