The formality of the US Federal Reserve Board's (FRB's) clearance is expected in January. This follows close on the heels of ICICI Bank getting a limited banking licence from the US Federal Reserve.
The other bank that has applied for opening branches in the US is another public sector bank, Bank of Baroda.
The Indian banks' applications for opening offices in the US were not being cleared by the US Federal Reserve citing inadequate anti-money laundering regulations in India.
In 2005, the country's largest bank had applied to the US regulator to set up its third branch in the US in New York's Jackson Heights area. The bank's existing two branches are located in New York and Chicago. It also has a representative office in Washington.
The NYSBD is the primary regulator for financial institutions operating in New York. The delay in processing Indian banks' applications by the US regulator had recently come under criticism from the Reserve Bank of India (RBI).
V Leeladhar, deputy governor of the RBI, had said, "During the period 2003 to October 2007, India had granted 19 authorisations to the US-based banks, most of which also stand utilised. However, during the same period of five years, the US did not authorise any office of the Indian banks in US territory."
ICICI Bank, whose application to open a branch in the US had been pending for three years, had in October received approval to open a branch in New York.
However, ICICI bank can only offer limited banking services like wholesale banking, including trade financing and factoring services to US-based subsidiaries of Indian companies.
While clearing ICICI Bank's application, the FRB noted, " The board has determined that the bank's home jurisdiction supervisory authority is actively working to establish arrangements for the consolidated supervision of bank and that considerations relating to the steps taken by the bank and its home jurisdiction to combat money laundering are consistent with approval under this standard."
In addition to the two branches, SBI also has a subsidiary incorporated in California, SBI (California). The bank has built an asset base of $4.6 billion till the end of November 2007.
SBI has 33 foreign branches and seven representative offices.
