The Indian arm of the Swiss financial services behemoth may soon launch its banking operations here, after receiving in-principle approval from the RBI
The Indian arm of Swiss financial services conglomerate Credit Suisse Group has received an in-principle nod from the country’s central bank, the Reserve Bank of India (RBI), to launch banking services here.
The multinational company (MNC), which has been operating in India with a focus on wealth management and investment banking, is likely to get its banking license soon. Mihir Doshi, country head, Swiss Bank India, confirmed the development to Moneylife. “We have received an in-principle approval from the RBI. We are still working on the modalities; (we) have not yet decided as to when we plan to launch our banking operations.”
Finance minister Pranab Mukherjee had in his Budget day speech earlier this year announced his intention to offer banking licenses to new entities. There was a lot of speculation in industry and media circles that the first to get banking licenses would be Indian non-banking finance companies (NBFCs).
Indian NBFCs like Indiabulls, Reliance Capital, Religare, IL&FS, IDFC and Aditya Birla Financial Services were considered likely to apply for bank licences after the announcement. Players like Aditya Birla Financial Services and the Shriram Group have already evinced interest in floating their own banks.
As such, Credit Suisse could emerge among the first companies to get the coveted banking license from the RBI. Its presence would mark the entry of yet another foreign bank in India’s banking fraternity. More significantly, Credit Suisse’s entry will usher in the sophisticated and professional practices of the world-renowned Swiss banking community.
Credit Suisse is active in over 50 countries and employs more than 48,000 people from approximately 100 different nations. Its total assets under management (AUM) as at 31 March 2010 stands at 1,270 billion Swiss francs.
This development is also significant as no new banks have been set up in the past eight years in India. In fact, no new Indian bank has been set up since the first flush of liberalisation in 1993 when half-a-dozen banking licences were handed out.
NBFCs that were earlier allowed to be converted into banks were Kotak Mahindra Finance and 20th Century Finance. While Kotak has diversified into various financial services, 20th Century became Centurion Bank; it was taken over by a bunch of private equity investors and eventually merged with HDFC Bank. Two of the other new licensees in the early 1990s—HDFC Bank and UTI Bank (renamed Axis Bank)—have become very successful private banks.
If the Sensex goes below 16,100, panic selling may start. If not, expect a laboured rise
The market pared early gains to end slightly higher than its Friday’s close. The Sensex ended 24 points higher at 16,469 (0.1%) while the Nifty shut at 4,944, higher by 13 points (0.2%). The bourses started the day in the green, taking cues from Asian markets. The market traded firm in the morning session but pared gains in the early afternoon session, wiping off most off the gains posted earlier in the session and touching an intraday low of 16,413 towards the close of trade.
Asian stocks were up on Monday tracking the rise on Wall Street on Friday. Key benchmark indices in China, South Korea, Indonesia, Hong Kong, Singapore and Taiwan were up 0.3% to 3.48%. On the other hand, markets in Indonesia and Japan fell by 0.27% to 0.36%.
US stocks snapped a three-day losing streak on Friday supported by bank stocks on investors’ confidence that the financial regulation bill won't be as onerous as some had feared. Bank shares rose a day after the US Senate approved a sweeping overhaul of regulations of Wall Street firms, capping months of wrangling over the biggest changes since the 1930s. The Dow was up 125 points (1.2%), to 10,193.4. The S&P 500 was up 16 points (1.5%), to 1,087.7. The Nasdaq rose 25 points (1.14%), to 2,229.
Back home, the monsoon is expected to reach the country's southern coast on 30th May and Cyclone Laila cyclone in the Bay of Bengal would not drive away the June-September rainfall, the weather office said. The India Meteorological Department (IMD) in late April said rainfall is likely to be 98% of the long-term average.
Prime minister Manmohan Singh said that controlling inflation will be one of the top priorities of the government.
China said that USA’s hint on easing controls on high-tech exports to China is an appreciated move. China’s vice premier said that the economic ties between China and US have enjoyed dynamic growth.
Foreign Institutional Investors were net sellers on Friday of Rs1,540 crore while Domestic Institutional Investors were net buyers of Rs 816 crore.
The government has reportedly asked telecom firms, which won third-generation (3G) spectrum in the recently concluded auction, to pay by 31st May. The government has collected almost Rs70,000 crore from the sale of 3G spectrum, nearly twice the projected revenue. The government could additionally generate about Rs15,000 crore from sale of pan-India licenses for broadband wireless access (BWA) services.
The board of directors of ICICI Bank (down 0.3%) and Bank of Rajasthan (BoR) (up 10%) have approved amalgamation of BoR with ICICI Bank. A swap ratio for the merger has been already set at 25 shares of ICICI Bank for 118 shares of Bank of Rajasthan. Bharat Forge (up 0.8%) has received a contract for engineering procurement and construction (EPC) from an independent power project (IPP). The company will execute the EPC contract under its 100% subsidiary. JK Lakshmi Cement (closed flat with a negative bias) is reportedly in talks to acquire an Egyptian cement firm for about Rs800 crore. Godrej Consumer Products (GCPL) (down 2.6%) will buy the entire equity stake in South America-based unlisted hair-care products maker, Issue Group. GCPL, which will get an entry into the South American market through this acquisition, did not disclose the size of the deal. Godrej said that the acquisition fits in the strategic objective of the firm that wants to increase its presence in hair colour, insecticides and soap businesses in Asia, Africa and Latin America.
Hindustan Construction Company (up 0.1%) has completed the repair and restoration of the damaged Malad water supply tunnel, in suburban Mumbai, well ahead of its scheduled date of completion of the project. With this, drinking water supply to the western suburbs of Mumbai can be restored to normalcy in the coming days.