Xi effect: Axis Bank taps Chinese lender for expansion funds

Third-largest Indian private sector lenderAxis Bank today said it has signed a memorandum of understanding with the China Development Bank (CDB).

This would help the bank support its corporate clients by funding them at competitive pricing and also give it an opportunity to work closely with Chinese companies in facilitating them in their domestic requirements in India, Axis said in a communication from Coimbatore.

The announcement comes even as China's President Xi Jiaping and Indian Prime Minister Narendra Modi hope to drum up more bilateral business.

''The India-China trade partnership is growing at a robust pace. We at Axis Bank are excited to sign an MoU with China Development Bank to tap newer business opportunities, emerging from the world's second largest economy," Srinivasan said.

On Wednesday, air carrier IndiGo had also announced a tie-up with the CDB to fund its new aircraft purchases. (See: IndiGo inks deal with Chinese lender to finance 30 new planes).

China is India's largest trading partner, with bilateral trade at $22.41 billion till June 2014, according to a report by India's ministry of commerce and industry. India and China have pledged to increase bilateral trade to $100 billion by 2015.

China Development Bank provides medium to long-term financing facilities that assist in the development of national infrastructure, basic industry, key emerging sectors and national priority projects. The bank's mandate is to promote Chinese exports to India and also support Chinese Companies, executing projects in India.

Axis Bank is on an expansion drive and is heavily depending on the CDB for funding

( Also see: Axis Bank to raise Rs6,000 cr through private bonds placement).