The State Bank of India is set for a significant restructuring of its business in the UK from April. SBI’s UK operations will transform into a subsidiary named State Bank of India UK Limited from 1st April. It will be in compliance with a wider ring fencing of capital requirements by the Bank of England. The retail branches of SBI in the UK will now fall under the UK banking entity instead of the previous status as overseas branches of an Indian entity.
There will be no visible change; the only change will be the change of brand to State Bank of India UK Limited. There are seven retail branches in London and five outside London. All the branches will be a part of SBI UK Ltd. There will be no dislocation in the day to day activities. Consumers will be carrying on the banking facilities as before, the move will only mark a shift for the bank with a higher focus on the UK market. The bank will be looking towards more business in the UK and expanding products which are designed for the market.
This strategic move follows Bank of England’s Prudential Regulation Authority which directs foreign banks to move from their retail status as overseas branches to independent entities in order to protect the depositors in the UK from any fluctuation in the foreign market. As a subsidiary, this will bring an additional comfort level. This restructuring has marked a major endorsement for London as a financial capital of the world despite the uncertainties triggered by Brexit.
The expansion of SBI in the UK market was welcomed as a vote of confidence by the City of London Corporation which has a remit to promote the British capital as a world leading financial hub. This move is seen as a reflection of the strength of India UK ties in financial services. SBI has been running an office in London since 1921 and will soon be building a 100-year-old relationship with the city. Apart from the seven branches in London, it has others in Manchester, Coventry, Birmingham, Leicester and Wolverhampton. All the cities have a large concentration of Indian population. The bank stated that the Indian origin customer will remain at the heart of its operations; it will use the expansion to cater to the larger UK market as a local bank.