Page 36 - Banking Finance January 2022

ARTICLE

Chinese Investment Corporation (CIC) entered into a 50- its presence. The DBS India is a WOS in India and
50 joint venture with an SWF in Singapore. Many such Temasek Holding, promptly used the leeway to scale up.
known and un-known partnerships or strategic tie-ups Whether, culturally and economically does it make
have come about in the last five years or so. Such sense to take such a risk when banking itself is going to
partnering apart from giving edge in financial leverage be less and less brick-and-mortar is another matter.In
and negotiation is also meant for political cover is the the current takeover of the weak Lakshmi Vilas bank
argument by experts in the subject. in India by the SWF supported DBS India in Nov 2020,
the motive, transparency and the real objective is
Y Many Legal issues and Tax issues have also cropped up
with the growth of SWF in the world of foreign unclear.
investment. Though the taxation of foreign investments Y There is also an issue of systemic risk, from SWF singly
is a favourable one with exemptions from capital or acting in tandem, through its investments in Global
appreciation or dividend income in many countries, it banks, as is noticed in sub-prime days when SWFs raised
has come into conflict with domestic / foreign private their stakes in big global banks like Citigroup, UBS,
equity investors. There is an issue of 'level playing Morgan Stanley, Barclays etc.
ground' often touted by the domestic investors when
it comes to tax exemptions. 7.0 Sceneto the future
Y The next issue relates to foreign investment climate. In SWFs are increasingly metamorphosing from passive investors
India, to some extent in our enthusiasm to attract in government securities to active investors in riskier
foreign capital, we have also liberalised the investment investments and equity markets. The component of SWF in
regime. In May 2016, the RBI allowed foreign banks to Inward FDI is going up in the world which clearly underscores
acquire 10 per cent in Indian Private Banks. The circular the risks emanating from sovereign actors in the conduct of
further allows foreign banks to take higher stake in international business. Arguably, this brings with it a bouquet
private banks in the case of re-structuring of a weak of issues with regard toBanking Capital, governance,
bank or in the interest of consolidation in the banking management and regulatory aspects in world of investing and
sector though subject to certain conditions. The RBI banking business. The goal of this article was to provide
Circulars subsequently has also favoured the Wholly- insights for a better understanding of the SWF, in such a fast
owned Subsidiaries (WOS)of Foreign Banks to increase changing landscape of Banking & Finance. T

HDFC Bank inks a MoU with Agra Smart City to launch
'Mera Agra' app

HDFC Bank signed a memorandum of understanding with Agra Smart City to launch "Mera Agra" app that would
enhance ease of living for the citizens and improve tourists experience. The app would be a convenient source for
accessing comprehensive information about the city and availing its public services. Citizens would be able to register
births and deaths through the app and also pay bills for water, property, parking and taxes. Users can use the app to
book tickets to historical monuments, get information related to timetable and fare of bus, train, and other modes of
transport and tourism.
"HDFC Bank supports all government initiatives aimed at enhancing ease of living and welfare of the people," said
Axay Kumar Dixit, Circle Head of HDFC Bank. "This collaboration would unify all services delivery and grievances redressal
facilities for citizens and tourists alike. This is a great move by the city administration for the benefit of the people.
This will go a long way in improving the stature and reputation of the city."
Mera Agra app would also enable the city administration to monitor progress on initiatives under Agra Smart City
Development. The city administration would be able to monitor cleanliness, which is its top priority under SwachhBharat
Abhiyan, to improve tourists' experience. Citizens would be able to communicate directly with the city administration
to resolve their grievances related to their area and neighbourhood. Citizens can use the app to report issues to draw
officials' attention. For example, to report potholes, pile of garbage or any unclean area they can click and uploading
its picture on the app. An assigned officer will send back a photo after the issue is resolved.

36 | 2022 | JANUARY | BANKING FINANCE