India denies security clearance to ‘Bank of China’ for opening a branch in Mumbai: ReportIndia has reportedly denied security clearance to ‘Bank of China’ for opening a branch in Mumbai.
India has reportedly denied security clearance to ‘Bank of China’ for opening a branch in Mumbai.
According to a report in The Telegraph, mainland China’s oldest bank had applied for security clearance in July last year.
Quoting its sources in Union Home Ministry, the report says that initially the ministry said it had no objections to the proposal as Bank of China would have to adhere to the Reserve Bank of India's rules and other regulatory guidelines before setting up the branch.
However, the ministry is reported to have now gone back on that position.
The report adds that the main reason behind denial of security clearance is primarily because of concerns over Bank of China's real and believed ownership.
The state-owned investment firm China Central Huijin owns majority shares in the bank, the oldest of China's five mega banks.
However, the report says that the Indian security agencies suspect that the People's Liberation Army's money too is invested - through the investment firm - in the bank, giving it direct leverage over its operations.
The report quotes government officials as saying that the move to block the clearance for Bank of China to open a branch in India is also a message to Beijing in view of the fact that China has not yet cleared a proposal by India to allow the State Bank of India to open a branch in its territory.
The SBI proposal was made around the same time as Beijing pitched for Bank of China operations in India.