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IDBI Bank to use Dubai as hub for its foreign currency transactions
DUBAI - IDBI Bank, one of India’s leading banks, plans to make its Dubai office as a hub for foreign currency transactions and will raise $500 million soon under its first dollar bond programme, a senior executive of the bank said.
Last month the state-controlled lender opened its first overseas branch in the Dubai International Financial Centre. The bank is planning a five-year medium-term note, or MTN, porgramme to sell its dollar bond.
“There is one small cost advantage if we raise money through Dubai office and that’s why we plan a $1.5 billion MTN programme,” B.K. Batra, Executive Director and Group Head for Corporate Banking of the bank, told Khaleej Times in an interview on Sunday in Dubai.
“We are... on track and first tranche to raise $500 million is expected within the next few weeks,” Batra said, adding: “We are looking at right time to raise money.”
“Now we are looking at making Dubai office as a hub for foreign currency transactions. We would provide foreign currency funding to companies located here and to Indian companies who have presence in this region through our Dubai office.”
“To meet local demand we are also raising foreign currency for short term and it could be for one year, two years and up to three years,” he added.
He said that Dubai provides very unique opportunity to serve the UAE and surrounding countries in the Gulf region to make it as a base in supporting the trade and business activity in this area. The emirate also helps to support whatever government and business class of the UAE is trying to do.
“We would like to focus first on the UAE and then other countries in the region,” he said, adding: “We want to focus on trade, tourism, financial services and travel.”
Responding a question about the challenges to banks, he said, “As far as banks are concerned they have to look at viable projects. If there is a viable entity, which needs banking products and services, I think there are opportunities for banks.”
“Opportunities are spread all around in markets such as Dubai, Abu Dhabi and other Gulf countries,” he said, adding: “This is quite an opportune time for IDBI Bank in the UAE because economy is improving after recent difficulties and now it is emerging in sectors like trade, travel and tourism.”
IDBI Bank is India’s leading provider of project and infrastructure financing. It is the second largest syndicator of loans in India and 4th largest in Asia-Pacific.
He said that this region offers quite good scope for syndication market as there are many local and Indian groups operating and they are trying to grow business here.
They also have financing needs and IDBI Bank is the only bank, which provides full range of services from initial stage like when the project conceived till execution, he said. Elaborating, he said that every project needs advisory services, funds, structuring and so many consultancy services.
“IDBI has been very strong in infrastructure sector and 20 per cent of our balance sheet is devoted to infrastructure sector. In India we have been pioneers in financing infrastructure projects such as power, telecoms, roads, airports, sea port and water services.”
abdulbasit@khaleejtimes.com
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