The Hindu Business Line : StanChart sees scope in cold storage, transport

PILOT SURVEY SHOWS THE WAY: Mr Neeraj Swaroop (right), CEO - India Region, Standard Chartered Bank and Mr Bala Swaminathan, Regional Head - Client Relationships, India & South Asia, at a press conference in Chennai on Tuesday. - Bijoy Ghosh

Chennai , May 16

The current year may be the one during which Standard Chartered Bank may implement its articulated plan of getting into agriculture lending and trading in bad loans — perhaps, by setting up separate companies for these operations.

With a view to finding out the bank's niche in agri-lending, it recently had a detailed survey of the apple trade, the bank's Regional Head - Client Relationships, Wholesale Banking-India & South Asia, Mr Bala Swaminathan, told a press conference here on Tuesday.

The survey, which tracked apples from Anantnag, J&K to Kolkata, found out that 50 per cent of the stall price in Kolkata went to various middlemen and the farmer got only 3 per cent. Also, the farmer lost value of fruits getting damaged.

Cold storage

Standard Chartered Bank accordingly decided that there was an opportunity to fund cold storage chains and refrigerated transport. The bank has begun to fund a large industrial group for setting up similar facilities in Himachal Pradesh and intends to encourage the group to get into J&K too, Mr Swaminathan said.

Earlier, Mr Jaspal Bindra, General Manager, South Asia, had said that Standard Chartered Bank might set up a separate company for agriculture financing. Asked about this, Mr Swaminathan said that the option was being examined.

Mr Neeraj Swaroop, Chief Executive Officer - India, said that the bank might set up an asset reconstruction company, probably by the third quarter of the current year.

The company would be a joint venture, in which the bank would hold 49 per cent, the most allowed for a foreign entity in an ARC.

Cross-border trade

Answering a question, Mr Swaroop ruled out local incorporation of the bank, saying that the slight tax advantage was not worth the effort of running a separate bank in India.

Mr Swaminathan said at the conference that since the bank had presence in 56 countries in Asia, Africa and West Asia, it was well positioned to fund cross-border trade and M&A deals.

"We want to be the leader in areas that are cross-border," he said.

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