India has granted a banking license to National Bank of Abu Dhabi (NBAD), making it the first UAE-based lender to operate in the country since 1980, three sources familiar with the matter said.
According to the sources, NBAD will begin operations in the world’s most populous democracy this year, whereas an Indian bank is expected to be allowed to set up in the UAE in return, with State Bank of India being the primary candidate.
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The move by NBAD is part of its plan announced in 2013 to build eight hubs in emerging markets across the world including Mumbai to tap intercontinental trade flows worth $137bn.
Dubai-based EFG-Hermes Holding analyst Shabbir Malik was quoted by Bloomberg citing his e-mail as saying that NBAD wants to be in a position to take advantage of the investment and trade flows that occur between the megacities situated within the west-east corridor.
According to the source, details of the cost and duration of the licence were not clear, but it would allow NBAD to perform all banking activities.
The only other UAE banks to win licences in India were Abu Dhabi Commercial Bank and Mashreq, which got licence in 1980.
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