November 06, 2001

‘3’

PROTOCOL TO SET UP AN INDIAN BANK SIGNED IN MOSCOW

    A Protocol of Intentions was signed today in Moscow between the State Bank of India (SBI) and the Central Bank of the Russian federation on the setting up of an Indian Bank in Moscow. The Protocol of Intentions marks the first stage clearance from the Russian authorities for the project.

    The decision to set up an Indian Bank in Moscow was announced during this visit of the Minister of Finance of India, Mr. Yashwant Sinha, to Moscow for the 7^th Session of the Indo-Russian Inter-Governmental Commission on Trade, Economic, Scientific and Technological and Cultural Cooperation that was held on January 11-12, 2001. Following this, discussions were held between SBI and Canara Bank, who agreed to form a joint venture for the project with a 60:40 stake in it.

    The Commercial Bank of India, as the joint venture will be called, will provide trade finance products such as LC’s, Guarantees, buyers, and suppliers’ credits, settlements, collections and remittances to Russian companies for their India-related business. It is based on the expectation of a robust growth in the economies of India and Russia and consequently, significant acceleration in the pace of economic and commercial cooperation between the two countries.

    The opening of the bank, which is expected to be operational in 2002 after completion of all necessary formalities, marks a significant step forward in the development of cooperation between India and Russia in the banking sector. It will also meet a long-standing demand of Indian and Russian businessmen for servicing of trade through a well-established, reliable banking channel between the two countries.