India's largest lender, State Bank of India is aiming to upgrade its current Gulf operations.
The bank has acquired an upgraded license for its operations in the United Arab Emirates (UAE) from the Dubai Financial Services Authority (DFSA). SBI has got Category 1 license that will allow it to offer corporate credit, accept deposits, arrange credit for investments, and also offer advice on financial products.
Praveen Gupta, SBI's regional head and chief executive for the Middle East and North Africa (MENA), said "The new license will allow us to offer corporate credit both syndicated as well as bilateral."
The bank will launch its new operations from its branch at the Dubai International Financial Centre (DIFC). According to DFSA terms, the branch can now provide credit in currencies other than the local currency, Dirham. It can accept deposits in foreign currencies like the US dollar, euro and pound sterling.
Chief Executive Officer of SBI's branch at DIFC, A. J. Vidyasagar said, "Our services are open to all nationals as we are determined to acquire a more prominent niche as a global player in international banking circles."
The acquisition of the upgraded license will also enable the branch to provide a whole range of corporate credit facilities such as working capital as well as trade finance, both fund-based and non-fund based, said Mr. Gupta.
"Along with these activities, we can also advise on and arrange investment deals and credit," he added.
SBI, which started its operations in the UAE with a branch under a Category 4 license in January 2007, is currently focusing on remittance services through tie-ups with local exchange houses, to full-fledged commercial and retail operations.
The bank has also been given a license to open a branch in Saudi Arabia. SBI is among the very few banks in the world to be allowed to operate independently in Saudi Arabia. Most other major banks of the world in that Gulf country operate in joint ventures with Saudi entities.
SBI which is ranked 57th on a global level, already has a natural advantage of servicing Indian clients involved with trading activity or investments in the Gulf.
There are over 4.8 million expatriate Indians in the Gulf.
The bank is targeting to raise its overseas revenue to 25% from the current 10%.