Bank of India has new and ambitious plans for its U.S. operations.

According to Gordhan Kathuria, chairman of the Bombay-based bank, growing trade between India and the United States has fueled a new strategy for American expansion.

In a recent interview in New York, Mr. Kathuria said the bank is planning to open a third U.S. office in Houston, add another 50 U.S. correspondent banks, and develop syndicated, dollar-based lending to Indian companies.

The bank is also discussing setting up strategic alliances with a U.S. fund manager and an insurance company, he said.

He also disclosed that his institution hopes to issue global depositary receipts . American depositary receipts may also be issued this year, after 28% of the government-owned bank has been sold to the Indian public.

The bank also expects to have a rating from Standard & Poor's by the end of this month.

Bank of India's interest in strengthening its U.S. activities coincides with growing interest among U.S. regional banks in expanding their own presence in India. First Union Corp., NationsBank Corp., and Bank of Boston Corp. have all either opened or applied to open offices there.

The sudden surge of activity at Bank of India's U.S. offices comes after rapid growth in U.S. trade with India and a gradual reduction in financial restrictions by Indian banking authorities. U.S. exports to India rose 44% last year to $3.3 billion, while U.S. imports to the country were up 8% to $5.7 billion. Regulations governing many transactions, such as foreign exchange trading and lending, have been partially or completely removed.

"Historically, controls meant that we were prevented from expanding," Mr. Kathuria noted. "Until a few years ago, keeping a $10 note in my pocket would have been a criminal offense."

Deregulation and a government decision to allow privately owned and foreign banks to enter the market have enabled Bank of India to more than double its assets to $10 billion over the last five years and allowed the bank to venture into new operations at home and abroad.

Mr. Kathuria, however, emphasized that the changing economic climate in India has also increased competition, compelling his bank to revamp.

Bank of India has added $50 million to its operations budget for investments in technology, for example, and its staff has had to learn new financial instruments and skills, like asset management.

Now that fixed profits are gone, Mr. Kathuria said, his bank's main concern is to strengthen earnings rather than increase assets. Both dollar loan syndications as well as expanded correspondent banking operations fit in with this plan, he said.

Bank of India has $600 million in assets in the United States, where it runs a branch in New York and an agency in San Francisco. The bank maintains correspondent banking relations with more than 90 U.S. banks, and it is discussing setting up similar relationships with others, including NationsBank, CoreStates Financial Corp., and Centura Banks Inc.

Mr. Kathuria estimated that given the rapid growth in trade between the two countries, his bank is well positioned to expand its own activities.

"We have 2,500 branches in India, and we know all the major Indian companies," he said. "Unlike money-centers, we can offer our services to U.S. regional banks without becoming a competitive threat to their own business," he added.

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