Banking key to deeper Britain-India ties: Osborne

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Britain's finance minister on Wednesday pinpointed banking and financial services as key to improved relations with India, on his first visit to the country since taking up his post.

Chancellor of the Exchequer George Osborne told business leaders in a speech in Mumbai that financial links were increasingly important and could be a driver of growth in both countries.

Osborne, whose Conservative Party won power in May, said British banks like Standard Chartered, which has been in India since the 19th century, could help the spread of financial services across India.

Currently about half of India's 1.2 billion people do not have a bank account, while fewer than 10 percent have life insurance.

"Offer them (British banks) licences in the medium-sized towns and smaller cities and they will jump at the opportunity to be part of the huge effort to bring modern banking services to millions more Indians," Osborne said.

He added: "I also want to see British banks doing more to help India increase its financial capacity so that access to capital is not a brake on India's economic growth."

Britain, which was badly hit by the global economic downturn because of its large financial sector, had much to learn from India and how it emerged from the crisis relatively unscathed, he added.

More Indian banks and financial services firms should set up in London, he said, after the State Bank of India -- India's oldest commercial bank -- said it was to make the British capital the headquarters of its European operations.

"This is precisely the kind of reciprocity our banking sectors need," he said.

More Indian banks in Britain would "help us form a new partnership for the global economy", he added.

Meanwhile, the London Stock Exchange and India's National Stock Exchange announced that they were looking at closer ties, including mutual licensing of indices and enabling access to each other's markets.

Osborne is part of a high-profile delegation of senior ministers, business leaders and the Prime Minister David Cameron.

He earlier rang the bell to start trading at the Bombay Stock Exchange, calling it "the beginning of an enhanced relationship", met the governor of India's central bank and helped launch a mobile banking services facility.

© 2010 AFP

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