New Delhi (Sputnik) — The 106-year-old Bank of China is all set to become the second Chinese bank after the Industrial and Commercial Bank of China Ltd to have a branch in India. On Wednesday, the Reserve Bank of India issued a license to the Bank of China — a formality that was pending for the last three years. The decision to allow the Bank of China to operate out of India was taken last month during a meeting between Chinese President Xi Jinping and Prime Minister Narendra Modi on the sidelines of the SCO summit.
Reserve Bank of India issues licence to Bank of China to operate in India.This was a commitment made by PM Modi to Chinese leadership: Sources— ANI (@ANI) July 4, 2018
Apart from the Bank of China, three banks from Iran, two from South Korea, one from Malaysia and one from the Netherlands had also applied for the license. Among the Iranian banks that had sought approval from the RBI were Bank Pasargad, Parsian Bank and Saman Bank. RBI has not issued a license to these applicants to date.
RBI has issued a license to Bank of China to operate its first branch in Mumbai-- sources— Rishikesh Kumar (@rishhikesh) July 4, 2018
China had permitted Indian banks to open seven branches in China since 2006. The State Bank of India was the first to start operations in China where it has two branches. The Bank of India, the Bank of Baroda, Canara Bank, ICICI Bank and Axis Bank have one branch each. With Chinese investments in India growing manifold in recent years, Chinese banks have been seeking the license to operate in India.
"By the end of 2017, Chinese investments into India added up to more than $8 billion, as India has become an important market for infrastructure cooperation among Chinese companies and a major investment destination," Gao Feng, a spokesperson for the Ministry of Commerce, had said in April this year.
Last year, bilateral trade between both countries touched a historic high of $84.44 billion, and in the first quarter of this year it witnessed robust growth, netting $22.1 billion, a 15.4 percent year-on-year increase.