RIYADH, 16 January 2005 — State Bank of India, India’s biggest state-owned bank with an annual revenue of $6 billion through overseas operations, may soon get the green light for starting full-fledged banking operations in the Kingdom.
“While I cannot give a definite time-frame with which the final approval will come, I hope it would come soon,” Saudi Ambassador to India Saleh Al-Ghamdi said in a message received here. “When SBI starts its operations in Saudi Arabia, it will be the first and the only Indian bank to have a presence in our country. Such a step will give a big boost to bilateral business relations,” the ambassador said.
He said SBI, which has 54 branches in 28 countries, is planning to open a total of 70 branches in 36 countries. “We already have banks from European and other countries doing successful business in Saudi Arabia. I don’t see any reason why Indian banks can’t do the same,” the envoy added.
Two Indian banks are operating here through tie-ups with Saudi commercial banks. They are HDFC, which works in partnership with the Arab National Bank, for ANB’s Telemoney remittance service to India, and ICICI, the country’s major private sector bank, which has an alliance with the Al-Rajhi Banking and Investment Corporation, for providing remittance facilities to Indian expatriates.
The ambassador said both the Kingdom and India would like to have the presence of that country’s biggest bank, which has already established its presence in Bahrain for servicing its Indian customers.
Quoting SBI figures, the ambassador said the bank, whose annual rate of growth through overseas operations has averaged five to six percent, has targeted a 15-20 percent growth rate over the next two to three years.
The ambassador welcomed SBI’s decision to make its debut in Saudi Arabia, which ranks among India’s ten biggest trading partners, fourth in terms of its exports to the Kingdom, and ninth in terms of imports (mainly oil) from this country. He said India sources 23 percent of its oil needs from the Kingdom.
Indian Embassy sources point out that the arrival of SBI in Saudi Arabia would be widely welcomed by the Indian community, which constitutes the largest segment of the country’s expatriate population. It could cater for the needs of NRIs in terms of housing, education and car loans. These are the areas where SBI is already offering products to the home market.
Another area of interest, especially for the labor category, is SBI’s micro-credit program for self -help groups( SHGs). It aims at funding 15,000 SHGs by March this year. These groups have been financed for a diverse range of small-scale business ventures. Since a majority of the NRIs fall in the low-income category, they could benefit from the SBI scheme.
The Kingdom opened up the banking sector recently by allowing two Gulf banks — the Gulf International Bank and the Emirates Bank — to set up branches in Riyadh. Other overseas banks, such as HSBC, BNP Paribas and Deutsche Bank, would also be making their debut in due course.