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Rabobank preparing its entry in retail banking in India

ING sells stake in Indian bank

Tags: Excerpts from the Windmill

MUMBAI, India – Sources in India suggest that ING may have taken a 'haircut of 17 percent' on its two-and-half-year-old investment in the Kotak Mahindra banking group. ING's withdrawal is yet another instance of a large European bank selling their shares of an Indian lender. The Dutch financial institution sold its entire 3 percent stake in Kotak through a bulk deal for $172.5 million.

The ING move followed Rabobank's sale of a part of its stake in Yes Bank to a group of domestic and foreign institutional investors for an estimated $210 million. Analysts in India see Rabo's move as preparation for an entry into the retail banking business in India. ING already operates the ING Vysya Bank in the country.

Rabobank has already been active in India for over 12 years and owns a 100 percent of the non-banking finance subsidiary Rabo India Finance. The Dutch agricultural and food industry specialist was one of the initial investors in Yes Bank, which was founded in 2004 and who now wants to set up its own operations in India. The stake sale is part of that process.

As a part of its overall business plan for India, Rabobank is obliged under the regulations to reduce its shareholding in Yes Bank pending approval of its application for a full banking license in India.

Rabobank has an international strategy that focuses on major growth markets with strong food and agricultural bases. It says that it wants to participate in and contribute to India’s growth in these and other sustainable sectors, including renewable energy and clean technology.