A four-year application process has concluded for one of India’s largest government-owned, the Union Bank of India which has been granted an institutional licence from the Australian Prudential Regulatory Authority to operate in Australia.
It is the third Indian bank to set up shop in Australia after the State Bank of India and Bank of Baroda.
The publicly listed bank – 63 per cent owned by the Indian government – will convert its representative office which it set up in Sydney in 2011 into a fully fledged operation of up to 10 employees.
The suite of services for the Sydney branch will include loans, remittances, letters of credit, and guarantees.
Union Bank’s chairman and managing director Arun Tiwari said it was important for the bank to maintain a presence and operation in Australia as bilateral trade between the two countries grows.
The $14.8 billion trade between the two countries provides opportunities for a third Indian bank to accommodate the growing needs of Indian companies doing business in Australia and for Australians going to India, Mr Tiwari added.
“As India grows, and accumulate pace, India will be one of the sweeter spots to do business with Australia. We need each other, India needs commodities such as copper and uranium,” he said in Sydney on Wednesday.
“We also want to provide an extended help to the growing Indian diaspora in Australia and we would also like to work with the local banks.”
There are about 500,000 Indians living in Australia, according to the bank.
While the dollar amount of financial transactions done by the group is not known, the loan book for the two current Indian banks in Australia total to just over $400 million.
Mr Tiwari said there are top-tier players in IT and mining in India already making plans to expand to Australia where Indian conglomerate heavyweight, Tata Group, already has a presence in IT and motor vehicle sales.
Another high-profile Indian investment in Australia, oilseed processor and exporter, Riverina Oils & Bio Energy, has been operating out of Wagga Wagga in country NSW since 2009.
“We also want to help these businesses with opportunities back in India when they open up,” Mr Tiwari said.
India’s Prime Minister Narendra Modi has promoted more trade relations with Australia and his reform plans for India with his “Make in India” program when he visited Australia late last year.
Asian banks’ sound track record in Australia bodes well for Union Bank’s future.
​According to Credit Suisse analysts, Bank of China and China Construction Bank have increased their market share of the corporate lending market in the past year.
Singapore’s DBS Bank, which was granted a licence mid-last year, plans to expand the size of its Australian loan book from about $500 million today to up to $5 billion within a couple of years.
Source: AFR
