A recent press report said that State bank of India has planned to open an Australian subsidiary within a year to meet the large retail market from Indians migrating to that country. Mr. Pratip Chaudhuri, Chairman of the bank, said that the cost of setting up a subsidiary at Australia will be around $75 million.
He said that Australia, along with Africa, was an important destination suited for SBI’s expansion because the present Sydney branch cannot handle smaller value retail deposits. He added saying that the bank may opt for an MTN (medium term note) in the second quarter of this year. The bank has $5-billion program which has been upped to $10 billion. SBI expects a rupee credit growth of 16-19 per cent and the bank is looking at a healthy growth in the foreign currency market.
Mr.Chaudhuri said that he was worried about the rising interest rate because people may not use the rupee for long-term borrowings, they may go for ECB (external commercial borrowing) and, with that, the demand for rupee loan may not be high. He also said that some people who cannot borrow in the ECB market may hold back expansion plans.