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The Chief Officers' Network - your business advantage / Front / Front Page / India: RBI grants licence to UBS after all

Reserve Bank of India Deputy Governor V Leeladhar made a public statement yesterday - but not on a public platform. He told journalists "It has been cleared. They can start a branch here," according to local media reports.

He is reported to have said that the clearance was delayed because the RBI wanted to clarify some transactions relating to UBS. However, he did not elaborate.

Technically, the licence was authorised last year but its issue was held back. Local reports say that the bank was "reluctant" to provide information relating to the transactions. But UBS had more problems. Standard Chartered tried to sell its mutual fund business to UBS - and the regulator refused to approve the deal.

Foreign banks are moving into India although the domestic banking sector remains, to all intents and purposes, a nationalised industry. DBS has two branches and is currently seeking authorisation for another. The Singapore Government's Temasek holds 28% of DBS (March 2007) and has recently increased its holdings in Standard Chartered to 19%. But it also held (as of March 2007) 7% of ICICI Bank, an Indian bank making it a major stakeholder in the Indian financial sector.

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