Tatas find a new strategic banking ally in the world’s largest bank ICBC

Around two-and-a-half years after having his first serious business engagement with Industrial & Commercial Bank of China (ICBC) in the capacity of chairman of the Tata Group, Cyrus Mistry announced an alliance with the Chinese banking heavyweight.

It was in the summer of 2013 that Ratan Tata had taken his successor Mistry to Beijing in order to introduce him to some senior bankers and government officials. It was there that he had met Jiang Jianqing, chairman of ICBC, the world's largest bank with $3.48 trillion in assets.

In this alliance, the Chinese lender will be the strategic banking partner to the $108-billion salt-to-software conglomerate, and is expected to help it further diversify its funding pool so that there is unhindered growth in the future. The bank would be ally to Tata group companies in India, China, Singapore, Europe, the US and South America, and would offer an entire plethora of financial products and services like global cash management, consulting, international trade finance business, investment banking, foreign exchange and derivatives trading. To ease this alliance, ICBC will also be making a global service team to support Tata group's strategic development plans.

From the other end, the Tata group will take into account the proposals from ICBC and seek its participation on mutual transactions and tender offers.

"We have been present in India since 2011 - the only mainland Chinese bank to have a branch presence here - adding value to Indian and Chinese corporates that are present here by offering the entire range of banking products. At a time when there is a growing India-China relationship leading to improved trade and Chinese investments, this is the perfect time for Tatas and ICBC to enter into a strategic partnership," SR Venkatesh, MD & Head of Corporate Banking in India, ICBC, told ET.

The relationship between the Tata Group and Chinese commerce is not new and has been there for almost 150 years. Currently, 15 Tata Group companies, including flagships TCS, Tata Steel, JLR, Tata Communications and Tata Global Beverages, employ about 6,300 people in China.
Last week, Tata Sons had announced a similar agreement with Export Development Canada (EDC), owned by the government of Canada. The agreement terms include an annual credit line of $500 million in lieu of exports from Canadian vendors within the Tata group's global supply chain.

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