Doha Bank plans $250 mn capital infusion in Indian operations

Doha Bank, Quatar-based commercial bank, plans infuse about $250 million as capital in Indian operations over three years to support loan book of $2.5 billion.

R Seetharaman, chief executive officer of bank, said it already has banking relationship with Indian corporates active in gulf countries.

The branch presence (three) in India will give us strong base to scale up business in growing economy.

Bank intends to grow India linked businesses by $5 billion. In terms of our exposure could be may be $2-2.5 billion. The bank would maintain healthy capital adequacy level, he said.

It opened branch in Mumbai last week and already has exposure of over $two billion to Indian corporate through overseas operations.

It is making beginning with three branches - two in Mumbai and one in Kochi. It took over the business operations of HSBC Bank Oman in India which had two branches (Mumbai and Kochi).

Bank would soon follow the wholly owned subsidiary model to do business in the country, as prescribed by the Reserve Bank of India (RBI). The operations in India will be converted into subsidiary in the near future, he said but declined to specify timeline.

The RBI, in November 2013, had released a framework for large foreign banks with over 20 branches to convert into wholly-owned subsidiaries.

The foreign banks which move to a wholly-owned subsidiary route will be given near-national treatment apart from capital gains tax and stamp duty benefits, it said.

Doha Bank has presence in 15 countries with total business - loan plus deposits portfolio - of over $25 billion.

About scaling up presence through acquisitions in India, Seetharaman said it continues to remain an option. "I am not ruling out because we need to scale up Indian brand equity," he said.

To start with, the bank will focus on wholesale, retail and treasury areas. It will also tie up with various financial institutions for its business growth.

There are NBFC and specialised Small and Medium Size Enterprises service providers who have constraints in terms of lending because they have capital constraints. We don't have capital constraints. We are going to work with multiple financial institutions," he said.