Mumbai, Feb. 18: Swiss bank UBS AG has finally secured the Reserve Bank of India’s approval to open a commercial banking branch in the country.

The licence had been held up after UBS was asked to clarify certain dodgy transactions between a Saudi arms dealer and Pune stud farm owner Hasan Ali Khan that raised a suspicion of a hawala racket.

“UBS has been permitted to go ahead (and open a branch),” RBI deputy governor V. Leeladhar told reporters on the sidelines of a function organised by the Union Bank of India.

UBS had applied for the branch licence back in 2004.

Reports said the central bank did not give its clearance as UBS was refusing to co-operate in establishing a money trail that linked Switzerland, New York, British Virgin Islands and Pune.

UBS already has a broking and an investment banking outfit in India.

However, foreign banks have to apply to the RBI to open branches in the country.

The RBI deputy governor said an application from DBS of Singapore to expand its branch network was also being considered. “It is in the final stages of discussion,” he added.

DBS has two branches in India — one in Delhi and the other in Mumbai.