Even though the Comprehensive Economic Co-operation Agreement signed last year between India and Singapore outlined that three Singapore banks would be allowed to open 15 branches in India, and three Indian banks given QFB status, no progress had been made till now.
Indian banks were not able to kick off full-fledged banking activities in Singapore, as MAS had been insisting on ratings as a precondition for offering QFB status to Indian banks. The RBI, too, did not appear very eager to allow Singapore banks to open more branches in the country.
"The ice has started melting. A senior MAS official recently met RBI officials in Mumbai, and hinted at giving QFB status to two Indian banks," said a source close to the development.
When contacted, an MAS spokesperson said: "Under the CECA, Singapore will grant wholesale banking licences, and up to three QFB licences to Indian banks that meet our admission criteria. We welcome the presence of Indian banks in Singapore, and hope this could catalyse deeper economic linkages."
However, the spokesperson pointed out that the CECA did not provide for automatic entry. "As with all FIs seeking entry into Singapore, applicants need to meet our prudential standards. Some Indian banks have applied, and we are working with the RBI to review the applications, and will make an announcement in due course," he said. Eight Indian banks are licensed to operate in Singapore.