The State Bank of India, 201 years old and with over $125 billion on its balance sheet, has been licensed by both the Saudi Arabian Monetary Agency (SAMA) and the Saudi Arabian General Investment Authority (SAGIA) to set up business in the Kingdom as a commercial bank. It will carry out the same business as the National Commercial Bank or SABB or Samba Financial Group — retail, corporate and treasury banking — “everything that the others are doing,” says a bank official.
It will be a while before it opens, “probably in eight to ten months time, possibly a year.” The right premises have yet to be found — five or six sites are currently being investigated — and, although the license has been issued, there is more regulatory paperwork to be done. Already, though, there are plans to go nationwide. The intention is, after Jeddah, to open branches in Riyadh, Dammam, and Jubail. Others will follow, although each new branch will be subject to SAMA’s approval. “We are working to establish ourselves throughout the entire country,” says the official.
Why Jeddah first? Three reasons are given. “First there are many Indian businessmen here. Second, there is the Haj business here and, thirdly, it’s a port city. We expect a lot of trade and finance business.”
The initial focus will naturally be on the Indian community — the largest expat group in the Kingdom, more than one and a half million strong. The bank sees its “Speed Remittance” system as a prime attraction. Commission will be minimal — “It will be intensely competitive in an intensely competitive market.” It will also be “almost instant” if there is an account at both ends. “We have a network throughout India, with branches in even the smallest towns. It is fine sending money to other banks if you live in Delhi or Mumbai or Chennai where all the banks have branches. But what if your family lives in a small Indian town? Speed Remittance will get the money instantly into their hands. No matter where you go, you’ll find SBI there.”
The expat community is seen as invaluable, not only in itself but also because of its wider business involvement. “There are already plenty of Indians doing business here and as Indo-Saudi links increase, so too will their activities,” says the official.
There are also the Indian professionals, such as accountants and business managers. “They will be our target customers.” SBI clearly hopes that they will act as an entrée to their Saudi employers.
But SBI is looking beyond the Indian community — although if it could attract a majority of them it would have a massive client base. Non-Indians too will be targeted. “We have a presence in 33 countries. We’re in London, in New York. Clients can open accounts in any permitted currency,” the official explained.
But it is as the anticipated massive growth in Saudi-Indian business relations that SBI is banking on. Already the bank has corporate clients in view. “Lots of Indian corporations are coming to Saudi Arabia. For them SBI will be the preferred choice,” believes the official. He sees the potential as enormous. “Activities will only increase, especially now that so many Indian companies are coming. Trade ties between India and Saudi Arabia are increasing every year. We want to be all over the Kingdom.”
SBI also hope to attract Saudi businesses too.
“We are not going to be a bank just for Indians,” says the official. “Our potential clients will be from among all the businesses that are here and going to be here. We are going to be a long-term player in the market and fully part of Saudi development.”
