HSBC has decided to set up a holding company in India called HSBC NBFC for its non-banking financial activities. | |
| The bank will bring its broking arm, mutual fund, and an operating non-banking financial services company (NBFC) under the holding company. |
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| The plan includes injection of $30 million into the proposed HSBC NBFC by HSBC Investment Bank Holding BV. |
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| The other step is for HSBC Investment Bank to sell its holding in HSBC Securities and Capital Markets Pvt Ltd (HSCM) to the proposed HSBC NBFC at par value of $20.55 million. |
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| HSBC (Hongkong and Shanghai Banking Corporation) also intends to increase its shareholding in HSCM and HSBC Asset Management (India) Pvt Ltd to 100 per cent from 75 per cent. |
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| HSCM has sought approval of Foreign Investment Promotion Board (FIPB) for its plans to reorganise its non-banking financial services businesses. |
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| HSBC spokesperson declined to comment on the development citing "silent period" ahead of announcement of the bank's financial results. |
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| The application said HSBC NBFC will set up wholly-owned NBFC operating company and other subsidiaries in financial services segment as required from time to time. |
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| HSBC wants to set up an NBFC to overcome the issue of reach for consumer financial services as RBI's branch licencing policy acts as a limiting factor. |
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| As an NBFC, the proposed HSBC arm will enjoy the freedom to decide on expansion. HSBC currently operates through 42 branches in the country. |
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| HSCM has informed FIPB that the total capital invested by the HSBC group in the financial services segment will be $50.55 million ($20.55 million in HSCM and $30 million in HSBC NBFC). |
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