SBI to stop accepting cash transactions and remittance in Shanghai from Oct 1

State Bank of India (SBI) has said that it will stop accepting cash transactions and cash remittance from its main branch in China (Shanghai) starting October 1, only four months after Prime Minister Narendra Modi 's high-profile community reception in the city, where he exhorted non-resident Indians (NRIs ) to play a greater role in India's growth story.

An announcement from the bank on its website said that cash transactions "will not be entertained" with effect from October 1, 2015, "as per the direction from our head office".

SBI officials in Shanghai said that the directive came from the headquarters after a periodical review, and left the branch with little option but to stop the popular service. Officials said the bank would focus on corporate banking as it in any case does not have a retail licence in China to serve the locals.

The move to scale down its retail service has left Indians, who were dependent on the bank to send remittance home, displeased as this was among few avenues to send money to their relatives in India without paying high transfer costs.

"There are people like Indian chefs and small traders, who needed the bank to send money home," said Tony Daryanani from Pune, who runs a popular tailoring business in Shanghai and has been staying here for the last 15 years. "Only in May, we had Prime Minister Narendra Modi come to Shanghai and tell people to help India grow and send money, and now they are telling NRIs that they cannot accept money and are not opening accounts anymore."

While officials say few people were using the service regularly, maintaining it required manpower and investment that did not make economic sense. Bank officials did acknowledge that the decision would cause inconvenience to Indians living in China, which they regretted.

An Indian who was using the bank to send money to his family said that the decision would also send a negative signal to NRIs in China about how India Inc was looking at the future of economic ties with the country in the coming months, after PM Modi's high-profile visit. "What message does this send to people who want to come to China and start businesses if they cannot using a major Indian bank to send money home?" he asked.

(In association with Mail Today)