Goldman Sachs seeks banking licence

Global investment banker Goldman Sachs is keen to set up a bank in the country and has approached the Reserve Bank of India (RBI) for the licence, its top official in the country said here today.

"We have applied for a commercial bank licence. Our file is in now," Goldman Sachs Chief Executive Officer and Managing Director for India Brooks Entwistle said at the OP Jindal University conference in the Capital.

Entwistle, however, said the bank licencing process is a long one in this country. "We understand that the process is a long one. We are committed to, when that process comes through, if it does, to continue our business in the appropriate way. But the important thing is to set up a business," Entwistle said.

Goldman Sachs already has a licence for an asset management business in the country. "We intend to launch the (AMC) business at some point in the near future," he added.

Currently, Goldman Sachs India's operations include investment banking, global investment research, operations and technology.

The RBI in its annual monetary policy unveiled last April had put on hold plans for liberalising operations of foreign banks. It is considered advisable for the time being to continue with the current policy and procedures governing the presence of foreign banks in the country, RBI had said then.

The roadmap was divided into two phases, the first phase spanning the period March 2005-09, and the second phase beginning April 2009, after a review of the experience gained in the first phase, the banking regulator had said.

Without specifying the time line for the review, the RBI had said, "the proposed review will be taken up after due consultations with the stakeholders once there is greater clarity regarding stability, recovery of the global financial system, and a shared understanding on the regulatory and supervisory architecture around the world."

As of June 2008, about 30 foreign banks, from 21 countries, were operating in the country with a network of 279 branches. In addition, 41 foreign banks operated through representative offices during the period.

During the July 2007-June 2008 period, three foreign banks were permitted to open 18 branches, while 11 were allowed to open representative offices.

As per the agreement with the World Trade Organisation, New Delhi has to allow 12 new branches of foreign banks in a year in the country. However, RBI has been more liberal than the commitments. Between 2003 and October 2007, the apex bank gave approval to about 75 new foreign bank branches.