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Sukuk.net: UAE urged to issue licences to Indian banks |
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A top official from India's state bank has urged the UAE Central Bank to begin issuing licences to his country's banks.
It is more than three decades since the Central Bank issued a full banking licence to any Indian bank, said AJ Vidyasagar, CEO of State Bank of India (SBI) in the UAE. Currently, Bank of Baroda remains the only Indian full-licensed bank in the country.
"The UAE Central Bank is not granting licences to Indian banks, so we are urging them to issue a licence," Vidyasagar told Emirates Business. "The majority of the expat population in the UAE is Indian and SBI is the number one bank in India, but we are not getting a licence from the Central Bank. SBI has been trying to get a UAE banking licence for decades. Our application is still ongoing. One of the benefits of issuing a licence is that there will be a deepening and widening of the UAE banking market. It will give more liquidity and more options and levels of expertise to the market.
Because its applications have been continuously turned down, SBI has decided to open an office in Dubai International Financial Centre, despite the many restrictions that it entails. The bank, which has participated in the recent $2.2 billion (Dh8.08bn) Dewa sukuk syndication, for example, cannot accept deposits from the local markets nor accept deposits in the local currency. "We can only get deposits from entities registered outside the UAE. So we have to look for some contacts, that's the only way," Vidyasagar said.
SBI's loan-to-deposit now is more than 1,000 per cent due to limited sources. Deposits make up only 10 per cent of its assets and 90 per cent comprise of borrowings from its own treasury.
"I don't want to put numbers but you can say that if I have $1 of deposit, I have more than $10 of loan," Vidyasagar said. "We have a regional treasury in Bahrain, which caters to our needs. It mainly raises funds from the international markets, not from India because Indian funds are for Indian operations but they can also source from there if the need arises.
Source: Business 24-7
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