Monday, April 9, 2007

JP Morgan to form asset reconstruction business with Yes Bank, Bank of Baroda, Bank of India and Union Bank

JP Morgan is setting up an asset reconstruction company in India along with public sector banks Bank of India, Bank of Baroda, Union Bank of India and private sector bank Yes Bank. The group has applied to the Reserve Bank of India (RBI) for its approval. JP Morgan will act as the knowledge partner in the joint venture, which will have an initial capital of Rs. 100 crores. If and when the RBI's approval is received, the four India banks will form a company in which JP Morgan will pick up a 27% equity stake. For this, it will have to get the permission of the Foreign Investment Promotion Board, since the investment will be treated as foreign direct investment. At present, the cap on FDI in asset reconstruction companies is at 49%.

Union Bank was earlier supposed to partner Standard Chartered Bank in the latter’s ARC set-up. However, due to delays, Union Bank has now switched over to the JP Morgan side of the business.

Read more in the Business Standard article.
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JP Morgan to set up asset reconstruction business in India

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