Japanese lender Sumitomo Mitsui Banking Corporation (SMBC), is exploring the possibility of operating as a wholly owned subsidiary, but will be very cautious in expanding its loan book here, a senior official said today.
"We are exploring; it depends on our growth and also our overall strategy not only for India but also for Asia and elsewhere," SMBC India country head Hiroyuki Kakita told PTI.
He said SMBC, which launched its second branch in the country here, feels India is a challenging country to work with. The challenges include the strict regulatory environment and competition.
SMBC India's total assets stood at USD1.36 billion as of March 2016 which were garnered in the three years of re- starting its operations in the country with a branch in New Delhi. Total advances stood at USD 596 million, and deposits at USD 638 million.
Kakita, however, said the bank will be very cautious in expanding its book here even though it has not faced any troubles on the asset quality front.
"It will not be so rapid, but steady and stable. We will not rush. India is a challenging country when it comes to regulatory requirements and competition," he said, when asked about loanbook expansion.
It can be noted most foreign lenders have been treading cautiously in the country for the last couple of years on a variety of reasons, including rising bad debts coupled with rising regulatory glare.
The RBI has a preference for foreign lenders registering as WOS rather than as branches. It has come up with the final guidelines on their licensing, but is yet to grant a single license despite getting at least four applications.
Kakita said SMBC doesn't have any pending branch licence request now, but may think of having presence in the cities having the presence of Japanese businesses in future.
SMBC helps domestic corporates external commercial borrowings and many of them are based in Mumbai, he said, adding they will also be serviced from the new branch.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)