The State Bank of India (SBI) is planning to enter the Saudi Arabian market, a top bank official told Gulf News. This move should not be seen as a surprise considering Saudi Arabia has a sizable non-resident Indian (NRI) population.
SBI wants to establish a trading house in Saudi Arabia, the only GCC country that does not have an SBI presence in it. SBI presently has eight exchange houses in the UAE, three in Oman, two each in Kuwait and Bahrain, and one in Qatar, with other offshore banking representative offices in Egypt and Iran. Another offshore banking representative office is under consideration in the UAE, but is said to be a mere technicality away from receiving permission to set up office.
Overall, the Gulf region maintains a substantial NRI population with string ties back home in India. Thus, SBI is now examining the possibility to allow NRIs to transfer post-maturity India Millennium Deposits (IMD) to their non-resident non-repatriable (NRNR) accounts. The NRNR accounts are non-taxable which makes them a popular buy amongst expatriate Indians. Furthermore, the IMD program is a Middle East only program.
SBI officials were also asked if they would be considering the launching of the IMD plan for NRIs living in the US, “We might consider it at a later date. However, we haven’t applied to the US authorities for regulatory clearance as our solicitors advised us that it would take a long time to secure clearances.” NRIs in the US account for 14 percent of all Resurgent India Bonds, which makes it an attractive market for SBI, should it file for clearance and receive approval.
SBI officials also said in a speech given to a gathering of NRIs in Abu Dhabi that regardless of which government is in power in India, no change of policy will take place and the government will not default on its obligations. –(Albawaba-MEBG)
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