HSBC keen on acquiring a private Indian bank

MUMBAI, APRIL 14. The Hongkong and Shanghai Banking Corporation (HSBC) has said that it would acquire a private bank for growing its business in the country if the Reserve Bank of India relaxes norms for such acquisitions by foreign banks.

``At the moment, the RBI regulations prohibit foreign banks from having a stake in excess of 20 per cent in other Indian banks. But once this norm is relaxed we do not rule out the possibility of acquiring a private bank", HSBC chairman, Mr. David Eldon, told reporters here.

Asked whether HSBC would be interested in picking up stake in State-owned banks when the Union Government takes a decision to divest its holding in them, he said management structure and operations of these banks were not complementary to HSBC's functioning. ``We would not like to invest in a bank only for dividends but also for growth", Mr. Zarir J. Cama, CEO of HSC India, quipped.

Mr. Eldon observed that in line with the global trend in the banking industry India would also go through a consolidation phase, whereby smaller banks would merge with larger banks or form joint ventures with foreign banks.

On the bank entering insurance sector in India, Mr. Eldon explained that HSBC was a `fast follower', in that it would want all the regulations governing the sector in place and let the industry stabilise before taking the plunge.

Mr. Eldon pointed out that the HSBC group had global expertise in both life and non-life insurance and it would like to have a presence in both segments of the insurance business in India. ``To make a beginning into the insurance sector we will function as third party insurers for new insurance companies which will soon be set up", Mr. Cama averred.

On the banking scenario in the country, MR. Eldon observed that it had changed dramatically during the last four years partly due to pro-active regulations of the central bank and also due to induction of new technology. He appreciated the two-way dialogue between the RBI and the banks for formulating regulations and other policy issues as being healthy for the development of the industry.

On the new business initiatives of HSBC in India, Mr. Cama said, the bank was on the threshold of signing a deal with a non- banking finance company for acquiring its portfolio of retail loans, comprising mostly of home and car loans, amounting to about Rs. 40 crores. ``Our consumer finance business has grown exponentially from nil to Rs. 600 crores in the last one-and-a- half years", he said, but declined to elaborate on the bank's deal with the NBFC stating that negotiations were in the final stages.

- PTI

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