Abdulkarim Ahmed Bucheery, chairman of the Bahrain Association of Banks, says many banks from Bahrain have shown interest in starting operations in India, but the slow regulatory process is a deterrent. He adds many banks are interested Islamic banking, which is not allowed in India currently. In an interview with Vrishti Beniwal, he says his country would provide a good opportunity to Indian banks to step into the Gulf region. Edited excerpts:
What do you think of banking operations in India?
We need to be given the opportunity to be present here in India. You already have five banks with nine branches operating out of Bahrain—State Bank of India, Canara Bank, HDFC Bank, Bank of Baroda and ICICI Bank. On the other hand, we only have one bank in India, BBK, which has two branches (Mumbai and Hyderabad). We have just been granted the licence for a third branch in Kerala. We have also applied for permission to open a fourth branch in New Delhi. Indian banks in Bahrain are fully involved in all the business aspects of the country. Our objective is to have much closer ties with Indian banks to be able to support major projects, whether in the Gulf or in India.
What makes you bullish on India in this environment?
One of the most important things we look at is India is continuing to grow. For you, it is a slow growth rate of 6.5 per cent; you like eight to nine per cent, which you are used to. But for us, six per cent is above any international standard. In Bahrain we grow at three to four per cent. If we can grow our business in line with the growth of your economy, it will be very good for us.
Which Bahrain banks are looking to enter India?
Many of our banks, especially from the Islamic banking sector, are interested in India. All these banks would bring capital, which is very much needed in India. Unfortunately, slow RBI (Reserve Bank of India) process and complicated requirements do deter them from doing so. We had to wait for two years to get the licence for our third branch, whereas when an Indian bank comes to Bahrain, a licence is usually granted within three months. But RBI has been very cooperative and understanding.
Is the delay only because of the slow processes or due to other concerns as well?
I think the slow processes basically result from RBI's inability to issue licences for branches. Metropolitan cities in India are overbanked, and RBI would like to direct some banks to villages and rural areas where there are no banking facilities. Banks coming to India for the first time don't want to go to far-off places; they want to be in metropolitan cities.
The regulator in India has not allowed Islamic banking. How can you address its concerns?
The regulator here would have to accept the fact that this particular nature of banking is needed in the Indian market. India, though not a Muslim country, has a very large Muslim community. It is larger than the whole GCC population. Of course, you need to understand how does it work and for that, we can always exchange expertise. Bahrain had also started from nowhere.