The Hindu Business Line : IndusInd ties up with UAE bank

Mr Bhaskar Ghose (left), MD, Indusind Bank, and Mr Mohammad Nasr Abdeen, CEO, Union National Bank, at a press conference in Mumbai on Monday. - Paul Noronha

Mumbai , March 27

IndusInd Bank said it would be able to provide its services and products to non-resident Indians in the UAE, through a tie-up with Union National Bank, which is based in Abu Dhabi.

The two banks today signed an agreement to treat each other as preferred partners and promote each other's banking services.

Speaking at the event to announce the tie-up, Mr Bhaskar Ghose, Managing Director, IndusInd Bank, said: "By setting up one or two branches overseas, Indian banks cannot compete with foreign banks due to the high cost of funds and lack of network. So our aim is to grow through bilateral tie-ups in strategic locations where there is a concentration of our stakeholders and clients."

This tie-up gives both banks access to each other's market without capital outlay, he said.

Union National Bank is jointly owned by the Governments of Abu Dhabi and Dubai and has a total asset base of $9.5 billion and net profit of $314 million. It has 37 branches across the UAE.

The alliance would cover banking services in retail banking, trade finance, global banking and investment banking.

Mr Mohammad Nasr Abdeen, CEO, Union National Bank, said: "This tie-up will make up for the lack of physical presence in India."

When asked about the bank's plans for India post 2009, when the Indian banking industry would be opened up for foreign banks, he said, "If we plan to grow outside the UAE, India would be on the top. Nobody can ignore the Indian market."

IndusInd Bank has 110 locations in India and two representative offices in Dubai and London. The bank has also got approval for 11 more branches, Mr Ghose said.

About the upward pressure on interest rates, Mr Ghose said, "Unnecessarily high interest rates are being quoted for bulk deposits, at over 9 per cent. Banks cannot raise money at these rates and still expect to make money unless they lend to a really risky customer."

The liquidity is usually tight in March, but this year the situation was particularly severe, he said.

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