Australia and New Zealand Banking Group has got in-principle approval from India’s central bank to open two new branches in the country, in a bid to strengthen its presence across Asia.
One of the branches will be based in the northern city of Gurgaon, a prime hub in the National Capital Region, while another is being set up on the outskirts of Bangalore city, the bank said on Thursday.
ANZ has a small presence in India, with just one branch in financial centre Mumbai, which it opened in 2011. ANZ had wound up its India operations in the year 2000 after it sold its Grindlays Bank unit to Standard Chartered for $1.34 billion.
ANZ, which has a presence in 15 Asian countries, last month got regulatory approval to set up a subsidiary in Thailand.
“The setting up of new branches [in India] will complement our existing branch in Mumbai. It will enhance coverage and connectivity for the bank. In coming years we plan to broaden our presence in the country to support our customers in the region,” Subhas DeGamia, CEO of ANZ India, told Forbes India.
He declined to comment on investments and the manpower which would be invested towards the new branches.
ANZ CEO (International and Institutional Banking), Andrew Géczy said the approval for new branches would strengthen ANZ’s regional strategy and “expand” their ability to support clients and build on our position as a leading bank in Asia.
DeGamia said Gurgaon was chosen as several subsidiaries of large multinational firms are based there. Gurgaon has the third highest per capita income in India, after Chandigarh and Mumbai.
The RBI approval is valid for 12 months within which time ANZ will finalise its plans before seeking final approval.
ANZ would focus on India-Australasia trade and investment corridor, DeGamia said. “As our Asian network expands, this is a strong proposition for Indian firms operating and planning to expand across the region; and multi-nationals with business interests into India.“
ANZ’s chief executive Mike Smith had previously said that the Grindlays sale “a big mistake” for the bank.
DeGamia said the resoundingly strong mandate for the new Narendra Modi-led government has raised expectations for swifter reforms.
ANZ expects a GDP growth of five percent in the twelve months to March 2015 and between 6 to 6.5 percent in the fiscal year ending March 2016.
Most economists have raised their annual forecasts for India’s GDP growth for March 2015 and 2016, on optimism that a kick-start to ecomomic reforms would help boost slackening growth and stubbornly high inflation would also come down soon.
The RBI this year granted in-principal approval to two companies, IDFC and Bandhan Financial Services, to set up banks in the country. The RBI is opening up the sector more widely to private firms, to increase what it calls "financial inclusion" and push banking services into the countryside.
About 480 million of India's 1.2 billion people, mostly living in the country's 630,000 villages, currently have no banking access. The sector is still dominated by state-run lenders and in the last 20 years only 12 private banks have been allowed to open.
India has 26 public-sector, 22 private and 40 foreign banks.
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