The Hindu Business Line : Rabobank looks to upgrade Indian arm into a bank

New Delhi, July 20 Rabobank, a global leader in food and agri-financing, wants to upgrade its wholly-owned Indian corporate finance unit — Rabo India Finance Ltd — into a full-fledged commercial bank. As a bank, it sees scope for offering more products, including trade financing.

At the same time, Rabobank is also keen to continue its support to YES Bank, in which Rabobank International currently holds close to 20 per cent stake. “We are looking for ways to upgrade our finance company into a bank. We are trying to find how we can get a banking licence and at the same time continue our support to YES Bank. It would be better if we can do both. We will approach the Reserve Bank of India on this,” Mr Rob Van Zadelhoff, Head (Asia), Rabobank International, told Business Line here.

The current regulatory norms may require Rabobank to pare its stake in YES Bank if the former were to now look at setting up its own banking operations here. Alternatively, Rabobank could wait until 2009, when it, like many other foreign banks, expects RBI to liberalise the entry norms for foreign banks. “Our entry as a commercial bank here could coincide with the liberalisation of the market in 2009,” Mr Zadelhoff said.

Rabo India Finance was established as private company in 1998 and offered fund as well as fee based products and services to the corporate sector. The company got converted from private into public company in 2006.

Feasibility study

Meanwhile, Rabobank is also looking to enter the ‘leasing’ business . “We are in talks with companies such as Philips for vendor leasing in the Indian market. The feasibility study is on. We have not taken a final decision as yet,” Mr Zadelhoff said.

Under vendor leasing, if a company, say Philips, were to sell medical equipment in India, then Rabobank’s company here could offer leasing for such transactions.

Main focus

Stating that Asia was an important region for Rabobank, Mr Zadelhoff said that the strategy was to focus only on five markets — Japan, Hong Kong-China, Singapore-Malaysia and India-Indonesia.

Related Stories:
Rabobank launches $100 m PE fund