Thank you very much for the invitation to join you for this inauguration ceremony. It gives me immense pleasure to announce another milestone in the international operations of State Bank of India with the opening of the Tianjin Branch.
2. China and India are two of the world’s oldest civilizations and have extensive trade, religious and cultural ties, since ancient times, for more than two millennia. The famous Silk Route, besides serving as a major trade route between India and China, also facilitated cultural exchange. India was also among the first countries to recognize the People’s Republic of China.
3. SBI is the largest bank in India and has been playing an important role in India's banking industry for over a century. With more than 14500 branches in India and 178 foreign offices in 34 countries, SBI has distinguished itself both at the domestic level, as well as international level, with the most extensive outreach that any Indian bank has.
4. In mainland China, State Bank of India (SBI) was the first Indian bank to establish a foothold, when it set-up a Representative Office in Shanghai in 1997, which was later upgraded to a full-fledged branch in April 2006. Later, a Representative Office was established in Tianjin in June, 2008, which has today been upgraded to a branch. With the Tianjin branch, SBI is the first Indian bank with two operational branches on mainland China. I commend the support of the Chinese Regulators as well as the Reserve Bank of India, who have encouraged co-operation in the banking sector of our respective economies.
5.Similar to the expansion initiative of SBI, Chinese banks, such as the Industrial and Commercial Bank of China (ICBC), have also been looking forward to establish their presence in India. ICBC’s presence in Mumbai and SBI’s opening a second branch at Tianjin, is a clear testimony to the growing importance of bilateral and economic relations between India and China. It is hoped that enhanced banking links between India and China will facilitate and promote increased bilateral trade and investment between the two nations.
6. The Indian economy continues to be resilient in the face of global headwinds. Economic growth during 2012-13 is expected to be about 5.5 per cent, as compared to the growth rate of 6.2 per cent in 2011-12. Considering the current global context and the slowdown in the domestic industrial sector in particular, the growth performance is satisfactory.
7. There have been some encouraging signs in the recent months on business sentiments. Moderation in headline inflation, estimates suggesting a good winter crop, continuous upward movement of the Purchasing Managers Index (manufacturing) since October 2012, and continued steady performance of the service sector suggest a recovery of the growth momentum.
8. Government has taken a number of steps to create a more investor-friendly climate and encourage foreign direct investment. Recently, FDI in multi-brand retail, civil aviation and some broadcasting services has been permitted. We are also taking steps to contain our fiscal deficit. We have initiated measures to move all welfare oriented cash benefits to a technology-enabled platform, and bring a greater degree of transparency and efficiency in the financial system.
9. In the infrastructure sector, we have recently constituted the Cabinet Committee on Investments (CCI) to ensure accelerated and time-bound grant of various licenses, permissions and approvals and clear major projects. This is likely to improve the investment environment and help in attracting private sector investments. We are also encouraging Infrastructure Debt Funds, which will help to meet the long tenor funds needed for the infrastructure sector. Besides, the Government is promoting Public Private Partnerships (PPPs) as an effective tool for bringing private sector efficiencies in creation of economic and social infrastructure assets. We recognise the need for total investment in infrastructure during the Twelfth Five Year Plan at over USD 1 trillion. We are confident of returning to 7% growth rate for the year 2013-14.
10. The People’s Republic of China has been clocking close to double digit growth, year on year,to become the world’s second largest economy and the biggest exporter of goods. Despite signs of slow-down and tepid growth opportunities world-wide, India and China, are regarded as the twin engines driving global growth today. China is India’s largest trading partner and our governments have pursued a policy of economic growth, which has consistently buoyed India-China trade. In December last year, our two governments set a trade target of 100 billion US dollars by 2015, and agreed to take measures to promote greater Indian exports to China with the signing of a joint communiqué. In an environment of growing trade relations and greater cross border investments, I look forward to Indian banks in China and Chinese banks in India playing a key constructive role.
11. Many Indian banks have established a presence in mainland China. There is a presence of a total of ten Indian Banks, including the State Bank of India, in mainland China. Foreign bank licensing policy is gradual in China, and all these banks are at various stages of establishing their operations. It is hoped that other Indian banks that have fulfilled conditions set for foreign banks in mainland China, also graduate to opening branch operations at an early date.
12. It is also hoped the Tianjin branch of SBI will take advantage of the growing trade and economic co-operation between the two countries. The strategic and economic importance of Tianjin is unmatched. The city flourishes due to its thriving manufacturing, engineering and technology industries, apart from being a major hub for trade interactions due to its modern and well-equipped port. Majority of the India-China trade is based on commodities, and, more critically, on imports of capital goods and services related to India’s infrastructure sector. SBI’s presence in Tianjin will enable it to facilitate such trade transactions.
13. In addition, Indian banks hope to fulfill the banking requirements of Chinese and Indian corporates in the region by providing them with an array of services in merchant banking and trade finance business. Among other things, the Banks shall also promote sustainable and balanced economic development and support job creation. I am confident that State Bank of India, and all other Indian banks in mainland China, will continue building on their successful venture in China.
14. Once again, I congratulate State Bank of India on adding one more footprint to its international presence. I wish them every success in their journey.