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Indian banks forced to inject funds into UK subsidiaries
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Bank of Baroda
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LONDON: Some of India's biggest banks like the SBI are being forced to inject hundreds of millions of pounds to capitalise new UK subsidiaries under new rules.
A recent tightening of regulations by the Bank of England for foreign banks offering retail services to UK consumers means that as many as 50 overseas lenders with branches in the country could face similar obligations, 'The Financial Times' reported.
India's largest bank, State Bank of India (SBI) and Bank of BarodaBSE -1.09 % are among those affected by the new norms following concern at the UK's Prudential Regulation Authority (PRA) that depositors in the UK could lose out if a foreign lender collapsed and its home regulator prioritised domestic depositors.
"In some ways it is unfortunate. But it is an incremental cost that we will absorb and we will move on. While we could have done without it, we don't see it as discriminatory," Sanjiv Chadha, the UK head of SBI said.
The bank is reportedly injecting about $300 million to capitalise a new subsidiary that it plans to set up by 2017 to house its UK retail banking operation, which has 10 branches and about $2.5 billion of customer deposits.
It is expanding in the UK by opening two new outlets in the London suburbs of Ilford and Hounslow and switching all its branches to seven-day opening. It recently launched new savings products and is moving into small business lending and buy-to-let mortgages.
More banks from outside the European Economic Area are set to adopt similar steps as PRA works its way through a 50-strong list of foreign banks from Asia and the Middle East allowed to offer retail banking services.
It is less concerned about wholesale banking operations being carried out by non-EEA banks in the UK via branches.
The UK rules partly stem from the bitter experience of the 2008 financial crisis, when Britain had to compensate depositors who lost money they had stowed in branches of Icelandic banks that collapsed.
A recent tightening of regulations by the Bank of England for foreign banks offering retail services to UK consumers means that as many as 50 overseas lenders with branches in the country could face similar obligations, 'The Financial Times' reported.
India's largest bank, State Bank of India (SBI) and Bank of BarodaBSE -1.09 % are among those affected by the new norms following concern at the UK's Prudential Regulation Authority (PRA) that depositors in the UK could lose out if a foreign lender collapsed and its home regulator prioritised domestic depositors.
"In some ways it is unfortunate. But it is an incremental cost that we will absorb and we will move on. While we could have done without it, we don't see it as discriminatory," Sanjiv Chadha, the UK head of SBI said.
The bank is reportedly injecting about $300 million to capitalise a new subsidiary that it plans to set up by 2017 to house its UK retail banking operation, which has 10 branches and about $2.5 billion of customer deposits.
It is expanding in the UK by opening two new outlets in the London suburbs of Ilford and Hounslow and switching all its branches to seven-day opening. It recently launched new savings products and is moving into small business lending and buy-to-let mortgages.
More banks from outside the European Economic Area are set to adopt similar steps as PRA works its way through a 50-strong list of foreign banks from Asia and the Middle East allowed to offer retail banking services.
It is less concerned about wholesale banking operations being carried out by non-EEA banks in the UK via branches.
The UK rules partly stem from the bitter experience of the 2008 financial crisis, when Britain had to compensate depositors who lost money they had stowed in branches of Icelandic banks that collapsed.
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44 minutes ago
हार्दिक ओआरओपी से असंतुष्ट आन्दोलनकर्ता पूर्व सैनिको से भेट करेंगे। हार्दिक आंदोलन को सपोर्ट करेंगे। हार्दिक ट्रक हड़ताल को भी सपोर्ट करेंगे। साथ मिलकर आंदोलन को देशव्यापी बनाएँगे। हार्दिक यूएस जाएंगे और वहाँ भी सम्बोधन करेंगे और वहाँ पर जाकर सच्चाई बताएँगे की गुजरात में क्या हुआ और विकास के नाम पर क्या हुआ है। हार्दिक भी फेस्बूक, माइक्रोसॉफ़्ट , गूगल और अडोबे, ओरेकल के सीईओ के मिलेंगे। ओबामा सरकार को मिलना उसके प्रवास का हिस्सा होगा। गुजरात से लेकर अमरीका तक लोलिपोप कैसे बांटी जाती है उसका पर्दाफाश करेंगे। -हिरेन पटेल अहमदाबाद गुजरात
26 minutes ago
The political rightism has highjacked the fundamental right of the citizen of India murder for eating beef is a shook all over the world and uncivilised behaviour that shows the governance of the bjp and the forked tounge and the double speak of the fkeu modi .Modi speaks of modern India and at home it is still uncivilised totally in everthing from swatch bharat to basic education and dirting of the rivers to everthing from vedic times to ancient times there is a growing communual intolearance every where and still India is not a civilised nation at all don't know the basic and fundamentals and learning from the west only everthing shame and disgrace This party has deliberately hijacked by political rightism they are spreading the right ideology and is totally against the instrest of the country and nation and no investments will come when the atmosphere is not conducive at all The bjp goverment is a total flop in its 16 month of governance
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