HSBC India has sounded evasive about converting itself into a locally incorporated entity, saying that changing the holding structure will not have a bearing on its broader strategy of doing business in the country.

Overseas lenders anyway do not wish to become a State Bank of India having a presence across the country with a large network, a top official from HSBC has said.

“Whether you operate as branches or whether you operate as a fully-owned subsidiary, makes no difference to our strategy here. Our India strategy remains the same,” HSBC India Chief Executive, Stuart Milne, said on the sidelines of the annual banking jamboree here over the weekend.

“I don’t think most foreign banks operating here actually want to be like a State Bank of India. They have a different strategy. How do you execute that strategy doesn’t make a difference whether you are a branch or a subsidiary,” Milne said.

“If we wish to expand our reach, then clearly we need to put our branches in the more under-banked areas and that is part of the cost of having a branch network here,” he said.

“It is perfectly appropriate for the regulator to ask us to do that and I have got no problem with it,” Milne explained.

Earlier this month, the Reserve Bank had released the final guidelines for foreign banks to becsome wholly owned subsidiaries (WOSs).

The guidelines offer them “near national treatment” and also the freedom to acquire local private banks and open branches without prior RBI permission, provided those foreign banks turn themselves into wholly—owned subsidiaries or get them locally incorporated in case of lack of adequate disclosures.

However, RBI governor Raghuram Rajan gave these foreign banks, which entered the country before August 2010, the option of continuing to operate as branches.

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