JPMorgan Chase & Co. (NYSE:JPM) announced in a release on Friday that they won approval of Reserve Bank of India to open three new branches in India, which are expected to operate in the next few months.
According to the statement, the three new branches will be located in the capital New Delhi, and small towns near Bangalore and Chennai. Back to 1922, J.P. Morgan started to present in India, when Morgan Grenfell, JP Morgan & Co in NY and its London affiliate, had an interest in taking the ownership of the merchant banking firm in Kolkata. Seventy years later, J.P. Morgan’s opened its first branch in Mumbai in 1994.
Kalpana Morparia, CEO, South & South East Asia, J.P. Morgan, said that the three new branches will help J.P. Morgan to provide better services to its current clients, including multinational companies and Indian firms who has worldwide trade links. The company said that all existing services and products, including cash management, trade finance, foreign-currency payments and lending services, will be provided in new branches. She also mentioned J.P. Morgan hoped to increasingly provide service digitally, just like other major banks.
“This is another significant milestone for growing our Indian franchise and deepening our banking footprint,” Ms. Morparia said in a statement. “The expansion endorses our long-term commitment to India, a key market for J.P. Morgan, as well as for many of our clients,” she said.
Currently, there are 46 foreign banks in India, most of the banks had a hard time in developing their businesses partly because of the restrictions posed on foreign banks. Foreign banks could only open limit numbers of branch according to the restriction, and they are required to distribute part of their lending to the priority sector, in which way the loans can be costly because the priority sector includes borrowers from weaker background. Under this circumstance, few banks, including Standard Chartered PLC, and Citigroup Inc, successfully expanded their business to India, while most of the major international bank planned to exit or consolidate their position in India.
HSBC Holdings planned to shut down 24 branches in India, according to a statement in May. Barclays also announced in January that it planned its equities business in India to lower cost for more profits. In the past years, Goldman Sachs Group set aside its plan to the previous application of commercial banking license. UBS Group and Morgan Stanley also gave up their commercial bank license.