Encouraged by growing Sino-India trade and the booming economy of the Communist nation, Vijaya Bank will draw up a plan to enter the booming Chinese market as part of its efforts to go global, a top executive has said.
"After visiting China and witnessing the development all around, we are seriously thinking that it will be a good idea to open an office either in Beijing or Shanghai," Chairman and Managing Director of Vijaya Bank, M S Kapur said in Beijing.
The Bangalore-based Bank has no international offices yet, Kapur said.
China is expected to open up its banking sector to foreign competition in 2006 as per Beijing's commitment to the World Trade Organisation.
Kapur, who attended the recently concluded '2005 Fortune Global Forum' in Beijing, said he was struck by China's success in the manufacturing sector despite the fact that most Chinese businessmen did not speak or understand English.
"It is amazing how China has developed its economy and how Chinese businesses have monopolised retail products throughout the world," he said.
State Bank of India, Bank of India, Bank of Baroda and ICICI Bank already have representative offices in China. The SBI is slated to start retail business in Shanghai later this year, official sources said.
India-China bilateral trade has risen from $3.5 billion in 2001 to $13.6 billion in 2004. By 2008, it is forecast to touch $20 billon.
With a number of Indian companies setting up representative offices and sourcing from China, the business opportunities for Indian banks are also growing, an industry official said.
Meanwhile, China has pledged to honour its commitment to the WTO and further reduce restrictions on business scope of foreign banks in 2005.
Foreign banks will be allowed to provide renminbi (Chinese currency) business in more cities, including Ningbo and Shantou, the China Banking Regulatory Commission, the banking watchdog said.
By the end of 2004, 116 operational entities of foreign banks had been granted renminbi licences, 61 of which were given the green light to provide renminbi services to Chinese enterprises.
The CBRC said foreign banks witnessed rapid growth in yuan deposit business last year, and a major part of their deposits came from foreign institutions in China.
Foreign banks extended the largest part of their renminbi-denominated loans to the sectors of manufacturing, wholesale, retail sales and property, it said.
