The United Kingdom has sought that British banks present in India be given the same benefits as those given by India to Singapore-based banks under Comprehensive Economic Cooperation Agreement (CECA) with Singapore.
Alan Johnson, Secretary of State for the Department for Trade and Industry, in a recent communication to Commerce and Industry Minister Kamal Nath, said that recent benefits accorded to the Singapore banks would provide 'unfair advantage' to them over the British banks which have been present in India for a long time.
Johnson pointed out that of the three international banks which had been operating in India for decades, two, Standard Chartered and HSBC, are British.
He said that the UK had been keenly following the Indian government's liberalisation plans of the banking sector particularly in the context of allowing more Foreign Direct Investment.
India has agreed to allow three Singapore Banks - Development Bank of Singapore holdings, United Overseas Bank Ltd and Overseas Chinese Banking Corporation Ltd to incorporate one insurance company, provided none of them individually or collectively hold more than 26 per cent stake.
The three banks have also been allowed to establish 15 branches in four years. New Delhi has also agreed to accord the same treatment to wholly owned subsidiaries of Singaporean Banks as it does to its banks on branching, places of operation and prudential requirements.
Government officials told Business Standard that Commerce and Industry Minister Kamal Nath had sought the views of Finance Minister P Chidambaram on the issue, ahead of the India-UK Summit next month.
The EU delegation is being led by the British Prime Minister Tony Blair as UK is holding the presidency of the European Union. Johnsonis also slated to be part of the UK delegation for the India-UK summit.
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