French bank BNP Paribas will soon ask the Reserve Bank of India's permission to establish a non-banking financial company (NBFC), according to local publication Business Standard. Jacques Michel, chief executive officer and country manager at BNP Paribas India, confirmed plans to launch a subsidiary offering services that Indian regulation prohibits from a bank, such as the sale of equity derivatives and structured products.
The bank has eight branches in India, which focus on corporate and investment banking and investment solutions. In addition, it has a 26% stake in life insurer SBI Life and a retail broking venture with the Geojit group, as well as other joint ventures.
As previously reported, BNP Paribas recently severed its mutual fund venture with the Sundaram group, following its acquisition of Fortis Investments. Indian regulations forbid the French bank from being present in two asset management joint ventures.
Baudouin Prot, BNPP's CEO, said the bank has no intention of stepping up branch banking or deposit-taking activity, but will focus on the businesses it already has. The bank has 320 employees in India, which contributes 1% to group revenues. Geojit BNP Paribas, the retail broking joint venture, is keen on developing the internet business and developing significantly in North and West India.