Indian and foreign banks operating in Mauritius are seeing good growth in business as Indian companies look to expand operations in Africa.
In fact, Mauritius is fast catching up with larger international financial centres such as London and Singapore, given its position as a gateway to Africa.
According Standard Chartered Bank data, over the last two years, trade between India and Africa has touched $40 billion and is expected to grow to $70 billion by 2015.
“London, with its inward-looking legislation, is crowding out companies. Most of the latest regulations by its banking commission are extremely protectionism-oriented. Because of this change, Mauritius is becoming more relevant,” said Mr Sridhar Nagarajan, Chief Executive Officer, Standard Chartered Bank (Mauritius). The total offshore banking business that flows through Mauritius is close to $150 billion, he added.
Expanding services
Traditionally, Mauritius was considered a sugar-cane centre, catering to the demands of European countries.
But the trend is slowly changing to a more advanced business centre especially for banking and offshore business, said a senior official from Bank of Baroda, which also has a significant presence in Mauritius.
Both BoB and StanChart cater to the local population and also offer offshore banking services to Indian and other corporates wishing to enter Africa.
The services include term loans and working capital; trade services, such as discounting of bills drawn in major currencies, remittance facilities for settlement of trade/investment transactions and global liquidity management for corporates.
StanChart also offers custodial services for companies that want to invest in Africa.
Indian companies setting up operations in Africa include firms in such sectors as IT, telecom, agriculture, agro-processing, irrigation, mining, power and pharmaceuticals.
IT hub
“Of late, Mauritius is developing as a hub for IT sector and is the gateway for the African Continent. Hence, lot of companies in the IT sector are setting up shop in Mauritius. One fully developed IT centre is already in place at Ebene and more IT parks are on the anvil,” the BoB official said.
StanChart Mauritius has seen assets grow at a compounded annual growth rate of 22 per cent over the past five years. As of 2010, the asset base was over $3 billion. The bank has invested close to $57 million over the last two years in its Mauritius operations, Mr Nagarajan said.
For BoB, too, business growth in its Mauritius operations has been around 25 per cent, said the official. The bank has seven branches and will add one more before the end of the current financial year. It also has an Offshore Banking Unit.
priyan@thehindu.co.in