Brazil’s Itaú looks to open branch in India: report

Latin American bank Itaú, based in São Paulo in Brazil, is exploring setting up a branch in India, Mint reported on Monday, citing unidentified people aware of the issue.

Brazil is currently India’s fifth largest trading partner, with bilateral trade in 2022 growing by 32% year-on-year to $15.2 billion.

State Bank of India is currently the only lender operating out of Brazil, and government approval for Itaú may be given if an Indian bank is allowed to open a branch in the Latin American country, the unidentified people said.

Queries emailed to the Brazilian embassy in New Delhi and Itau bank’s management did not immediately elicit a reply.

Global banks looking to set up shop in India need to get the Reserve Bank of India’s (RBI’s) approval. RBI allows foreign lenders to either set up subsidiaries or branches.

As on 31 January this year, there were 45 foreign banks operating either as a wholly owned subsidiary or a branch out of India, none of which were from Latin American countries, RBI data showed.

Itaú had assets to the tune of $544.3 billion at the end of the December 2023 quarter, up 9.2% from the year ago quarter, according to its earnings data.

The Brazilian bank, which is present in 18 countries, also operated 3,502 branches in its home country and abroad as on 31 December 2023.  The bank, which has a network of 43,800 automated teller machines (ATMs) doesn’t operate anywhere in Asia.

India last year invited Brazilian companies to participate in its growing supply chain to further strengthen bilateral ties. Commerce secretary Sunil Barthwal visited Brazil in October last year for the sixth time to discuss ways to promote trade relationship between the two countries.

India and Brazil have established the trade monitoring mechanism (TMM) as an institutional mechanism to monitor and identify bottlenecks in bilateral trade and take appropriate measures to address them. Since 2008, the trade monitoring mechanism has met five times, the last meeting was held on 4 October in Brasilia.

A recent S&P Global Market intelligence report said Itau has held its position as the largest Latin American bank in the yearly rankings, leading an all-Brazilian top five.

The people cited above said that the bank may look at GIFT City in Gujarat as the entry point into the country.