Mumbai: European entity ABN AMRO Bank has applied to the Reserve Bank of India (RBI) for setting up operations in India, primarily for financing the gems and jewellery sector. The regulator has given it an ‘in-principle’ nod to establish a wholly-owned subsidiary in India, reports Business Standard.
Globally, ABN AMRO offers financial services to the diamond and jewellery sector through its arm, The International Diamond and Jewelry Group (ID&JG), the government told the Rajya Sabha.
AMRO Bank NV was operating in India since 1921. In October 2007, ABN AMRO Holdings NV, the parent of ABN AMRO Bank, was acquired by a consortium. After reorganisation of business, in April 2009, ABN AMRO NV was resurrected as a banking entity in the Netherlands. The ID& JG business came under ABN AMRO Bank NV, except in India, where this business was under Royal Bank of Scotland (RBS) NV.
In February this year, RBS announced its exit from India, as part of a pull-out from Asia. Now, ABN AMRO Bank has expressed interest in bringing this business into the formal banking set-up under its banner. The Gems and Jewellery Export Promotion Council has made a representation to the government for granting a banking licence to ABN AMRO Bank, one of the largest financiers to the diamond sector.
Meanwhile, another European bank specializing in lending to the gems and jewellery sector is exiting India, with Antwerp Diamond Bank closing operations. In September 2014, the Brussels-based KBC Group, which owns Antwerp Diamond Bank, said it would wind down its loan portfolio and activities across many countries, including India. The bank had started operations in India in 2001.