UCO Bank to merge branches in Hong Kong as it realigns overseas operations

Move follows RBI's ban on LoUs; With almost zero capital needed for opening a branch in Hong Kong, Indian banks long have been upbeat in opening branches there

Following the Reserve Bank of India (RBI)'s ban on letters of undertaking (LoU), Kolkata-based UCO Bank is planning to merge its two branches in Hong Kong. The country has the second highest number of foreign branches by Indian banks after the UK. 

“The ban on LoUs has impacted the business of foreign branches, and we definitely think one branch in Hong Kong is enough to cater the needs of the region," R K Takkar, MD and CEO, UCO Bank, told Business Standard.

Financing through LoUs and buyers credit has been a mainstay for most Indian banks in Hong Kong, accounting