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ShareBangalore: In a bid to get around the tight regulations on opening new branches by foreign banks, Citibank India has decided to go underground, literally, to expand its network.
Expanding on the success of the co-branded '2-in-1' Delhi Metro Citibank Credit Card launch last year, Citibank has proposed opening up transit spaces at existing and upcoming metro rail stations that will provide various banking services to customers.
"We are constrained with getting new branch licenses because of regulation and what we would like to do is move all our new outlets into the metros. We need not be on the high streets to do business but at the same time be closer to the customers," Jeff Semenchuck, executive vice-president, Citigroup Inc told DNA.
He also leads the Growth Ventures & Innovation team at Citigroup, which identifies growth opportunities in emerging markets and develops new corporate ventures.
Comprising both Citi employees and external partners, Growth Ventures & Innovation makes equity investments in start-up companies to develop strategic partnerships.
Citibank has already broached the subject with the Delhi Metro Rail Corporation (DMRC), and is looking to kick off the transit spaces in a phased manner once the deal is through, Semenchuck said.
"We will also approach the Bangalore Metro rail authorities and every other metro that will come up in the country," he added.
The model is on the lines of the relationship Citibank has with the Singapore Mass Rapid Transport (SMRT) Corporation Ltd., which allowed the bank in 2006 to open 10 branches and 51 instant banking centres across all stations.
These transit hubs in the SMRT stations designed by Jonathan Ive, who has a cult following after the success of the iPod he designed, are just one tenth of the size of the typical branch.
They have brought down operating costs 25% and helped increased revenues 20%, added Semenchuck who, prior to joining Citi, was head of Global Innovation at Pfizer Consumer Healthcare.
As of March 31, 2009 Citibank operated 40 branches in 28 locations across India. While opening more branches is subject to RBI regulations, recently the central bank has relaxed the norms for opening up automated teller machines ATMs.
Further opening up transit points at metros is a sound business model for us and going ahead we would like to offer the full range of services from them, Semenchuck said.
