Q&A: R Seetharaman, CEO, Doha Bank

'We should get licence to open branch in India soon'

Doha Bank expects its plan to foray into India is likely to materialise soon. The Qatar-based lender has been waiting for six years seeking approval from the Reserve Bank of India. In an interview with Malvika Joshi, Chief Executive Officer R Seetharaman says it is a good time to enter India, which is grossly under-banked. Excerpts:

You were keen on opening a branch in India. When do you think the idea will materialise?
It is close to conclusion. We had applied for a branch licence with the Reserve Bank of India in April 2005. RBI asked us to re-submit the application last year. We have been waiting for six years for the licence. Now, it should materialise soon as Doha Bank alone has got an exposure of a billion dollars in India in terms of funding to the corporate sector. Also, both Qatar and India are moving bilaterally in the right direction with respect to trade, banking, finance and investment.

Of the total business, what is the share of the Indian corporate sector?
India’s corporate sector forms 20-23 per cent of our business.

Looking at the financial crisis all around, do you think it is a good time to enter India right now?
I think it is time now. India is grossly under-banked. You need foreign players to beef up the financial stability in a country. As far as Doha Bank is concerned, there is a strategic advantage due to the proximity with the Gulf. Also, the Gulf states are actively investing in India in terms of human capital. Now, it is time for us to get a licence and become a professional intermediary for trade, investment, banking and finance.

What are the areas of operations you would be looking at?
We have a strong franchise in terms of trade, treasury, e-commerce and corporate finance. Retail banking is not possible as India is a huge country and it is difficult to operate with limited branches. Thus, we will be looking at corporate banking and finance, treasury, e-commerce and investment banking. For us it is an opportunity with respect to lending and investment.

A lot of Indian banks have shown interest in setting up branches in the Gulf countries including Qatar. What is your take?
It is good as competition is healthy. We have tie-ups with Axis Bank, IndusInd Bank, State Bank of India and Federal Bank by which we make NRI remittances worth Rs 3,000 crore to India each year. Also, with a large exposure in India in terms of investments, there is a logical relationship between the two countries.

You have signed a memorandum of understanding (MoU) with the SME Development Chamber of India. What are the highlight points of the MoU?
We are going to welcome the Indian business community to Qatar. Both start-up or existing businesses can come there and collaborate with the local bank. We will be providing them with risk advisory services, like project selection and information on market access, capital financing, overdraft and bill discounting facilities. We will also help them with infrastructure and technology set-ups. There is a huge opportunity for Indian businesses in the Gulf in terms of cost of capital which is eight to nine per cent cheaper than in India. Labour costs are less and there is advantage of proximity.

What has been the impact of the global economic crisis on Qatar?
Qatar is a performing economy and we will have about 18 per cent growth this year. Oil wealth and natural gas reserves have kept the economy insulated. We are a current account, fiscal and investment surplus nation. Market correction in terms of real estate is already over and there is financial stability. However, we are insulated but not isolated.