It has an asset base of $ 1.6 billion and lead managed the first privatisation power project in Oman. It is also one of the participating bankers in the $ 2 billion Oman LNG project. In a conversation with Pranjal Sharma, Issa explains how Bank Muscat will not be just another bank from the Middle East.

Why did you bank chose India for its first overseas expansion?

We have been thinking of expanding for some years now. Our strategy is to follow the trade flow of Oman with the differentcountries. India is one the largest trading partners of Oman. While Oman imports goods worth $160 million from India, it sells products worth $80 million to Indian. Also more than 90 per cent of the expatriate professionals working in Oman are from India. So it makes sense for us to begin operations in India first.We have a representative office in Dubai but it will take some time before be are operational there. Our Bank is planning to expand our operations in South Asia. The countries which were are planning to start operations are Bangladesh, Pakistan, Iran, Egypt and Yemen.

How will you compete with the large western multinational banks and Indian private banks?

We have a focus on quality services and we will target the Indian middle class. There is a large population of Indian who are not happy with the service they are getting from Indian public sector banks. We will be technologically advances and will offer credit cards, ATM facility, and telephone banking for our customers.

While thewestern banks are targeting the top end, we will be in the middle market. There will be competition from Indian private banks, but I think there is enough scope for banks with good service.

Also Bangalore will not be our only branch., We plan to expand our branches in other parts of India and will seek the Reserve Banks's permission for this soon. Bank Muscat plans to become a part of one of the two ATM networks being planned in the country. Canara Bank is planning a country-wide ATM network and the other network is being planned by Mastercard. Once these networks get operational we will feel the lack of branches.

Most banks from the Middle East who are operating in India depend heavily on NRI money. Will you follow the same plan?

Unlike other foreign banks in India, Bank Muscat does not plan to depend too much on FCNR deposits. As foreign banks in India do not have a wide branch network they are largely dependent on FCNR deposits from NRIs to fund their liabilities. Bank Muscat will accessdomestic deposits. As a consequence of high premiums on the dollar, NRI deposits have become an expensive means of financing resources, hence the domestic depositor base has to be accessed. Bank Muscat will tie up with an agency which will help it to penetrate the market. We are planning to offer finance for consumer goods. Since we will no the able to reach all parts of a big country like India, we will tie-up with local finance companies to reach the consumers. Housing finance is one of the sectors we are closely looking at. If the business grows, we might just create a separate company for it later.

What about projects finance? Will you focus on infrastructure financing?

Yes, lending money for infrastructure projects is on our agenda. There are several projects which we would like to participate in. We could even set up separate companies to handle specific sectors, but that will be decided much later. There are many Omani investors who would want to take up equity stake in Indianventures.

Bank Muscat also plans to help bring in foreign direct investment in India and get involved in trade finance.