JPM JP Morgan Chase and Co

By Shefali Anand 

MUMBAI -- J. P. Morgan Chase & Co. has received approval from India's banking regulator to set up three new branches in the country, the company said in a statement Friday.

"We have a great commitment to this country," said Kalpana Morparia, chief executive for South & South East Asia, J.P. Morgan, in an interview.

The bank currently has one branch in India, in Mumbai. Ms. Morparia said that the new branches will enable the bank to better service its existing clientele, which includes multinational companies and Indian firms which have international trade links.

The U.S. bank's move to expand in India comes after some other foreign banks trimmed their India ambitions, partly because the country hasn't grown as rapidly as previously hoped, and because some European banks have been struggling in their home countries.

"In recent times, they've been pulling back as compared to investing," said Saswata Guha, director at ratings firm Fitch India Services Pvt. Ltd.

Of the 46 foreign banks with a presence in India, only a handful have built a sizable business, including U.K's Standard Chartered PLC, and Citigroup Inc.

In the last few years, Swiss bank UBS Group AG and the U.S.'s Morgan Stanley surrendered their licenses to operate a commercial bank India, and Goldman Sachs, which had previously applied for a commercial banking license, shelved its plan. All three companies operate other businesses in the South Asian country, including an equities and an investment banking business.

Foreign commercial banks face restrictions on the number of branches they can open in India, and they are required to allocate a portion of their lending to the so-called priority sector, which includes borrowers from economically weaker backgrounds. Such loans can be costly.

J.P. Morgan also has to abide by these rules, but Ms. Morparia said that the Reserve Bank of India has recently made it easier for foreign banks to meet the requirements. For instance, banks can now buy portfolios of priority-sector loans from India's state-run banks, which have a large presence in rural India.

Ms. Morparia said that J.P. Morgan's focus in India will remain on companies with international trade links and other large firms, to whom it will provide commercial-banking services including cash management, trade finance and foreign-currency payments, and lending services, as needed.

The bank's new branches will be in New Delhi, and near the south Indian cities of Bangalore and Chennai. Like other major banks, Ms. Morparia said that J.P. Morgan is looking to increasingly service clients digitally.

"We've made significant investments in our tech platform to basically embed a virtual branch across [clients'] desktops," said Ms. Morparia.

Write to Shefali Anand at shefali.anand@wsj.com

(END) Dow Jones Newswires

July 01, 2016 10:04 ET (14:04 GMT)

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