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Our Bureau

Mumbai , Dec. 1

THE Standard Chartered Bank's wholly-owned subsidiary, Standard Chartered Investments & Loans Ltd, a non-banking finance company (NBFC) will start operations in January.

The non-banking finance company, the second one to be set up by Standard Chartered Bank in India, will start with an equity capital of $7 million to be scaled up to $50 million subsequently.

The NBFC is being set up with costing advantages in mind, said Mr A. Christopher M. Low, CEO, India Region, Standard Chartered Group. It will raise corporate bonds/commercial papers in the market and transfer it to the bank.

This should fetch better rates for the bank since NBFCs do not have to provide CRR and SLR on their borrowings unlike banks, he explained at the sidelines of a press conference.

The NBFC will not raise retail deposits since this would attract statutory requirements but will disperse wholesale loans. In September 2003, the Government had cleared the FDI proposal of the bank to set up a 100 per cent wholly-owned NBFC in the country.

Meanwhile, the bank has developed an Internet-based product to facilitate trade, financial transaction and logistics of the same.

The bank has invested over $100 million in the development of `B2BeX' and is to launch it in India early next year.

`B2BeX' already launched in Hong Kong, Singapore and the UK is expected to break even in two years by way of commission and overall increase in volumes of related businesses.

In Indian faction of the bank, trade finance contributes to a quarter of the total revenue of the entity.

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