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India’s Baroda and Axis Banks’ eye Sri Lanka

Sunday Times, Sri Lanka

India’s Baroda and Axis Banks’ eye Sri Lanka

4 May 2008

The government is forging ahead with the Comprehensive Economic Partnership Agreement (CEPA) which will facilitate the entry here of two Indian banks - Bank of Baroda and Axis Bank, according to senior officials at the Central Bank.

“Right now we are still reviewing the applications by these two banks, but we are also waiting for the CEPA to go through, because that will make it easier,” a Central Bank official told The Sunday Times FT.

According to banking industry sources, Axis Bank, formerly UTI Bank, had applied to start operations here before ICICI Bank did. “For some reason at the time UTI did not get approval, but ICICI did,” an industry source said. The Central Bank official noted that as much as foreign banks are needed in the country, the regulator does not want to overcrowd the industry with Indian banks.

He said a team from the Department of Commerce was due to meet its Indian counterparts on CEPA this week. “This matter will be under service sector liberalisation in CEPA,” the official said. The local banks that are awaiting CEPA are the Commercial Bank, HNB and Sampath Bank - to set up office in India.