Doors open for Singapore banks

21 June 2005

New Delhi: The government will grant special economic access to Singapore, including treating the Island Nation's banks at par with Indian ones, and scrapping duties on a host of goods.

Commerce minister Kamal Nath said the agreement is an integrated package comprising trade in goods and services, an agreement on investments and mutual recognition pacts in services, education, intellectual property rights and media.

India will ease investment rules for Singapore firms in local enterprise through a treaty. Singapore will, in turn, relax visa restrictions for Indian professionals.

The bilateral 'comprehensive economic cooperation agreement' approved by the centre allows three Singapore banks - DBS , Overseas Chinese Banking Corp and United Overseas Bank - national treatment, which means they can function as freely as local banks here.

The government's move marks a significant policy change. Soon after the announcement today, Singapore's DBS Bank made an open offer for up to 20 per cent in Cholamandalam Investment & Finance Company at Rs150 per share.

Indian banks in Singapore, which include State Bank of India, Bank of India, Indian Bank and Uco Bank, will receive similar treatment in that country, the treaty said.