The move forms part of a global $1 billion-plus investment plan by the bank to strengthen its cash management and treasury liquidity capabilities, invest in technology solutions and expand its global footprint.
J.P. Morgan's investments in India are being boosted despite a growing concern that the global financial crisis will significantly reduce the country's economic growth. The Reserve Bank of India earlier this month took emergency action to cut the cost of borrowing and pump liquidity into the local banking system.
"The Indian market is going through significant change, but the cash management business remains a critical component to make sure there is enough liquidity and credit in the market,ö says Linda McLaughlin-Moore, a managing director and product management and delivery executive in Asia-Pacific for J.P. Morgan Treasury Services.
ôCash management is a transactional business, hence volatility in the capital markets and commercial trade generates more activity in the cash management business. In the current economic climate, trading partners start to change terms of invoicing, which in turn changes how we process our business,ö she notes.
Clients are looking to adopt best practice cash management solutions, as well as transparency and automation, to boost efficiency and help consolidate their liquidity faster, the bank says. They are also looking to move to electronic processing in order to help ease liquidity and credit constraints.
ôIndiaÆs large geographic size makes paper very slow to move, so we have been engaging in some image capability to help ourselves and partner banks to more quickly access the image of the paper and start to process the information to our customers,ö adds McLaughlin-Moore.
The bankÆs treasury services division provides cash management, trade finance, and foreign currency clearing account services to some of the largest India-based firms within the financial services, manufacturing, IT, infrastructure, chemicals, aviation and retail industries.
Services provided by the bank will include an integrated electronic banking platform, high-value and low-value electronic payments and receipts, local and out-station cheque clearing, liquidity solutions, as well as a range of trade finance and structured trade finance. It will also include export credit, agency-backed financing solutions, supply chain, logistics advisory services, risk mitigation solutions and freight payment audit services.
J.P. Morgan is the worldÆs largest US dollar clearing and commercial bank. Its treasury services business provides payment, collection, liquidity and investment management, trade finance, commercial card and information solutions to corporations, financial services institutions, middle market companies, small businesses, governments and municipalities worldwide.