ICICI Bank fears that the requirement of maintaining in India assets equivalent to 75 per cent of its domestic deposits could suppress its overseas growth. | |
| Section 25 of the Banking Regulation Act (BRA) requires each banking company to maintain assets in India equivalent to not less than 75 per cent of demand and time liabilities in the country. |
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| This may restrict ICICI Bank from building overseas asset portfolios and exploiting overseas business opportunities, the bank said in its prospectus for a bonds issue filed with the Securities and Exchange Board of India (Sebi). |
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| The bank believes that the international markets present a major growth opportunity. The bank's strategy for growth in international markets is based on leveraging home country links for international expansion by capturing market share in select international markets. |
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| It has identified North America, the United Kingdom, Middle-East and south east Asia as the key regions for establishing an international presence. |
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| It has established wholly-owned subsidiaries, ICICI Bank UK Ltd and ICICI Bank Canada and also has established offshore branches in Singapore and Bahrain and representative offices in New York in the US, Dubai in the United Arab Emirates, Shanghai in China and Dhaka in Bangladesh. |
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| The bank said it proposes to increase the scale of operations in each of these locations by launching appropriate products that leverage our technological capabilities and relative cost efficiencies. |
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| The bank has also stated that Section 19 of the BRA, which restricts opening of subsidiaries by banks, may prevent it from exploiting emerging business opportunities. |
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| Similarly, Section 23 of the BRA contains certain restrictions on banking companies regarding the opening of new places of business and transfers of existing places of business, which may hamper our operational flexibility. |
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