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China bank to fund Indian infra

China bank to fund Indian infra

Just as the world’s largest bank in terms of profit, market capitali­sation, and customer deposits ve­ntured into India last month with plans to fund the infra­structure sector, the Indian gov­ernment also gave its nod to Indian com­panies to raise loans up to $1 billion in Chinese yuan. The Indu­strial and Commercial Bank of China (ICBC) launched its Indian operations by inaug­urating its Mumbai branch. The bank, which has a licence for wholesale banking, plans to focus on commercial banking services in the first phase. The bank got the approval from Reserve Bank of India (RBI) on 16 May this year.

According to its President Yang Kaisheng, ICBC plans to focus on the bilateral trade between India and China and target Chinese companies in India in power, infrastructure and telecom. ICBC is also open to helping Indian companies looking to raise bonds denominated in Chinese yuan. The bank plans to tap the domestic market and enter investment, private and personal banking.

The Chinese lender offers services to more than 260 million personal customers and 4.12 million corporate clients through its network of over 16,000 branches at home and abroad and 1,500 correspondent banks. The cost of borrowing from China is far less and this would provide the much needed boost to the Indian companies.Will this development also make Indian lenders pull up their socks?

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