Fimbank, the Maltese trade financing bank, has outlined plans to invest US$100mn into India Factoring and Finance Solutions (IFFSL), after buying 30% of the firm.
After purchasing the stake in IFFSL from Punjab National Bank, Fimbank is looking to enhance its business in Asian-based pre-export financing and commodity finance.
The bank intends to inject the capital over the next five years as it mulls the set-up of trade finance desks in India.
Fimbank is currently eyeing offices in India’s tier two cities in order to capitalise on the country’s recovering economy.
The bank is awaiting a decision from the Reserve Bank of India, which is currently investigating a different trade finance licensing regime for specialised banks in the country.
A specialised licensing regime for trade would be viable, according to a spokesperson from Fimbank, as it would allow acceptance of deposits and, in turn, make funding more attractive with cheaper rates for small and medium-sized enterprises.