JPMorgan Chase & Co. is opening three branches in India, expanding in the world’s second-most populous nation even as global competitors pull back. (LiveMint)
The Reserve Bank of India granted approval for the biggest US bank to open the outlets in New Delhi and in smaller towns located near Bengaluru and Chennai, according to a JPMorgan statement. The New York-based lender has one branch in India, in Mumbai, which opened in 1994. The expansion comes as banks including UBS Group AG and HSBC Holdings Plc reduce their presence in India amid pressure to cut costs and bolster capital. JPMorgan is seeing an increasing level of cross-border activity among its clients as they capture more business driven by the South Asian nation’s economic growth, Madhav Kalyan, chief executive of the bank’s Indian unit, said in a statement.
JPMorgan will open the branches in the capital New Delhi, Devanahalli near Bengaluru, and Paranur near Chennai in the next two months, according to the statement. They will provide existing products and services including cash management, trade finance and foreign-currency payments, it said.
HSBC said in May that it plans to shut almost half of its branches in India and rely more on digital banking to expand its consumer business in the nation. Morgan Stanley decided not to set up a bank in India even after receiving approvals from the RBI in 2012. UBS closed its commercial banking business in the country as part of measures to conserve capital, and Royal Bank of Scotland Group Plc is winding down its banking operations there. JPMorgan’s presence in India dates to 1922, when J.P. Morgan & Co. and its London affiliate Morgan Grenfell took a stake in Andrew Yule & Co., a merchant bank in Calcutta, a city in the country’s east that is now known as Kolkata.
Some foreign banks have been seeking a greater branch presence in India, but have been deterred by RBI rules that prevent them from focusing their branch openings in the larger cities, where the population is wealthier and there’s a greater concentration of multinational companies. Over the past two years, the central bank approved Standard Chartered Plc’s plan to open outlets in the central city of Chhindwara and in Nakatia in the north. The London-based lender is the largest foreign bank in India by branches, with 100 operational outlets. Bloomberg