has the best financial infrastructure in the country. Almost all
major banks and financial institutions, both national and foreign,
have a business presence in the state. Mumbai is the hub of the
country's financial services sector. The Reserve Bank of India,
India's central bank, and the State Bank of India, the country's
largest commercial bank, are head-quartered in Mumbai. In the
financial services sector, virtually all the foreign entrants have
selected Mumbai as their centre of Indian operations. These include
Merrill Lynch, Goldman Sachs, Morgan Stanley, UBS Securities, SBC
Warburg, BZW and the Jardine Fleming Group.
The banking network spans all of Maharashtra and reaches even remote
rural areas. As of June 1997, there were 5,982 branches of
commercial banks operating in Maharashtra. This does not include
branches of private banks and co-operative banking and thrift
institutions. The key international banks operating in cities like
Mumbai include Citibank, American Express Bank, Deutsche Bank,
Standard Chartered Bank, Hongkong & Shanghai Bank, ING Bank, ABN
Amro Bank, Bank of America, Chase Manhattan Bank, Credit Lyonnais
and Japanese banking majors such as Fuji Bank and Sakura Bank.
The two largest
domestic investment banks in India (owned partially by the
government of India), the Industrial Credit and Investment
Corporation of India and the Industrial Development Bank of India
are head-quartered in Mumbai. These institutions not only provide
project funding, but also a range of project advisory services, from
conception and definition to implementation. These institutions have
been often hailed as the financial backbone of Indian industry and
play an important role in the national economy. The state
Government-owned Maharashtra State Finance Corporation provides
loans and financial assistance for small and medium size projects.
For larger projects, the state government participates through SICOM
Limited, an autonomous organisation engaged in project advisory
services, jointly owned by the government and development financial
institutions. This agency also provides training and advisory
facilities to would-be and first-time entrepreneurs.
prerequisite to industrial development and growth is the existence
of a sound capital market. Maharashtra's stock exchanges are: Bombay
Stock Exchange, Over the Counter Exchange and Pune Stock Exchange.
Bombay Stock Exchange (BSE)
BSE is the largest
stock exchange in the country, with a market capitalisation of
approximately Rs.4 558 billion (US$ 127.75 billion) as of October
1996, which makes it one of the largest stock exchanges among the
emerging economies of the world, with over 5,969 companies worldwide
listed on the exchange. BSE was the first Indian bourse to replace
the open outcry mode of trading, with screen-based on-line systems.
Over The Counter Exchange of
OTCEI has been
promoted by leading financial institutions of India. It was
established with the objective of providing a window to small
companies (which would have otherwise lacked resources) to approach
the large capital markets for funds to meet capital requirements.
Established on similar lines as the NASDAQ in USA, OTCEI was the
first stock exchange to set up a computerised screen-based trading
system in India. It introduced concepts like market making and
bought out deals to the Indian stock markets. Corporates with an
issued capital between Rs.3 million and Rs.250 million can be listed