National Bank of Abu Dhabi begins branch operations as WOS

The National Bank of Abu Dhabi (NBAD) today entered the country through the wholly-owned subsidiary (WOS) route with a wholesale banking operations in Mumbai.
With this, NBAD becomes the fourth foreign lender to start operations via the WOS route after the Singaporean lender DBS (May, 2015), ICBC of China (2012), FirstRand Bank of South Africa in 2013 and Doha Bank in April this year.
The Mumbai branch will provide wholesale banking services covering areas of debt origination and distribution, project finance, trade finance and asset finance, helping to enhance NBAD's ability to service corporate and financial clients apart from providing more capital to businesses, NBAD Group chief executive Alex Thursby said.

The opening of the branch comes as NBAD has completed migration of an Indian corporate loan portfolio worth around USD 900 million from Royal Bank of Scotland.
Thursby ruled out the bank entering the retail business in the immediate future.
He said the bank has brought in USD 25 million (the minimum required under the RBI norms) equity into the branch, which has already hired 20 people which will go up to 30 soon.

The Mumbai operations will be headed by Rajeev Pant as chief executive and will offer expert advice in each of NBAD's five key industrial sectors - energy, real estate, financial, transport and aviation, and retail, he said.

"Entering India is an important milestone in our expansion across the West-East corridor, and demonstrates the UAE's strengthening ties with its largest trading partner," Thursby said, adding that the bilateral trade stood at USD 65 billion last year.
NBAD has a balance sheet of USD 100 billion, out of which 20 per cent comes from overseas operations spanning 18 countries.
RBI favour WOS as it helps ring-fence the local unit from any pressures which its parent may face in its home market or in its other global operations, and demand for getting them incorporated locally have been on ever since the 2008 global credit crisis.

There are close to 100 foreign banks operating in the country and all of them operate through branches/rep offices.
In November 2013, RBI issued a new policy incentivising WOS and also ensured changes in laws, including tax and stamp duty benefits, but none of the lenders fell in line so far.
Under new rules, those foreign lenders with 20 or more branches have to go WOS over the next few years.
Currently, only StanC, HSBC, and Citigroup have over 50 branches and fall under the mandatory WOS route. But those entering the country after August 2010 will have to follow the new norms.