India's largest lender, State Bank of India has received the permission from the Chinese Government to lend in the local currency -Yuan, a top official said on Thursday.
SBI is the first Indian bank to receive this permission from the Chinese authorities, who are traditionally conservative in allowing foreign banks to do business in the local currency.
SBI expects to start lending operations in Yuan from March 15, SBI Deputy General Manager, Overseas Expansion and Planning, Naresh Malhotra said.
"We have got the approval from the Chinese Government to lend in Yuan. With this, our Chinese operations are getting into a different level as we were dealing in mainly US Dollar so far," Malhotra said.
State Bank has one full fledged branch in Shanghai and a representative office in Tianjin. The bank is planning to open a branch in Guangzhou and upgrade the Tianjin repo office to a branch in due course, Malhotra said.
With a view to support its business growth in the region, SBI has so far invested around $45-million in China, he said.
The bank would mainly target the Indian firms, which have operations in China and were relying on Chinese banks to secure Yuan loans, Malhotra said.
"This is a big business opportunity for us as these Indian firms (who have operations in China) will now approach us to secure the necessary funds. This will certainly give a push to our business growth there," Malhotra said.
Presently, SBI has 142 oulets abroad, which include over 64 branches under five subsidiaries. These subsidiaries are Indonesia (6 branches), Mauritius (12 branches), Nepal (32 branches), California (7 branches) and Canada (7 branches).
SBI currently derives around 13-14 per cent of its total revenues from overseas operations and has targeted to take it to 20 per cent over the next few years, Malhotra said.
SBI Chairman O P Bhatt had said on Wednesday that the bank plans to launch a string of retail products in its Canada, UK branches, which, the lender has already experimented successfully in Singapore.
Earlier, Bhatt had said that the bank also have plans to change its UK centre as a major hub for its European business.
