Bank of India, a leading public-sector bank in India, opened its first branch on the Chinese mainland in Shenzhen on Thursday.

Located in the Golden Business Center in Luohu District, it is the only branch of an Indian bank in Shenzhen. Indian Finance Minister P. Chidambaram, Indian Ambassador to China Nirupama Rao and Shenzhen Mayor Xu Zongheng were present at the opening ceremony held in Shangri-La Hotel.

Xu awarded the bank 2 million yuan (US$256,000), in line with a one-year-old policy of encouraging financial institutions to set up offices in Shenzhen. Xu welcomed the bank, saying that Shenzhen's finance industry had experienced a growth rate of 19 percent last year, the best in 10 years.

Chidambaram said the bank could serve as a platform to support economic cooperation between China, India, Singapore and other countries. "The presence of one of the best representatives in India's banking system will further enhance commercial relations between India and Shenzhen," he said.

The branch was upgraded from a representative office, which was set up three years ago. According to Chinese law, a representative office cannot be upgraded into a branch within two years of establishment.

Bank of India is the latest foreign bank to expand its business in Shenzhen this year, after Citibank and Standard Chartered. Chidambaram said Bank of India is undaunted by competition. "Indians are natural bankers," he said.

There are about 200 Indian companies in Guangzhou and about 100 in Shenzhen. Last year another Indian bank, Allahabad Bank, also set up a representative office in Shenzhen.

The ambassador said seven other Indian banks are waiting to do business in China.

Editor: Yan