For HSBC, India is becoming a happy hunting ground: last year, India figured in the list of top 10 income earners for the group.
HONG KONG: For HSBC, the “world’s local bank”, India is fast becoming a happy hunting ground: last year, India figured in the list of top 10 income earners for the group. And going forward, Naina Lal Kidwai, group general manager and country head, India, wants HSBC India to account for a higher share of the group’s profits.
“We aren’t going to get more branches readily because of the regulatory stipulations, so we have to find other ways to grow,” says Kidwai.
The following is an excerpt from an interaction in Hong Kong on Wednesday: How badly is the regulatory environment in India cramping the growth of foreign banks in India?
I don’t think regulation is a growth inhibitor. Look at the way HSBC has grown -- 50% profit growth over the last year. So, regulation in itself is not a serious impediment. Of course, it would make life easier if we could get all the branches we want. But I refuse to take that as an excuse not to deliver. I think the opportunity for us in an economy that is buoyant and growing is to find ways to service different types of customers and to develop different points of excellence. So, yes, regulation is an issue, but it is not insurmountable.
Is there any likelihood of the 2009 deadline for opening up the banking sector to greater competition, envisaged in RBI’s February 2005 road map, being advanced?
I don’t see 2009 being advanced, honestly, because there’s a lot that should happen before 2009. I think we should first see consolidation in the sector, and see Indian banks getting their technology platform sorted out. The regulations are there to help Indian banks become strong, after which the sector will be opened up to other players. Whether it will happen in 2009 or later will depend on what happens now.
What are the top areas where you would like to see financial sector reforms? Your wish list, as it were…
As we see Indian banks become stronger, we will see an opening up of the banking sector, which will allow for consolidation in the sector, which is very much needed. My wish list is related to that: Today, in the top 10 banks in the world, there are two Chinese banks, but none is Indian. My wish is that we have an enabling environment that would allow at least one Indian bank to be among the top 20, in the next 5 years.
Secondly, I would like to see the best standards of corporate governance in India. We have over 6,000 listed companies in India, but only 100 or so have standards of corporate governance that are acceptable.
My third wish relates to diversity of people in the workplace: India should become a country where the best of talent anywhere in the world would want to come to work. I would love to see a Hong Kong Chinese or a Mexican colleague, in India. That will bring in the best talent to India. We are not there yet because of lack of infrastructure… That would be my next wish: better infrastructure.
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