On March 25, Development Bank of Singapore received Reserve Bank of India permission to open eight branches.
MUMBAI: On March 25, Development Bank of Singapore received Reserve Bank of India permission to open eight branches. The branches — spread across Pune, Nasik, Bangalore, Chennai, Kolkata, Moradabad, Salem and Surat — had raised expectations that DBS will jump into the retail banking market.
However, the bank has no such plans and will continue to focus on existing businesses in the country, chief executive officer Pranam Wahi told DNA Money.
DBS plans to roll out all the eight branches by the end of this year.
“With these eight branches… The basic platform has been set, we have the products and we only plan to scale up from here. We see this as the first stage in India and in Stage 1, we will continue to look at the mass affluent. We will not be a mass market bank,” Wahi said.
DBS’s businesses in the country include wealth management for high net-worth individuals, servicing companies and financial institutions together with small and medium enterprises (SMEs). Wahi said the bank will continue with those and is not looking entering into retail phase in the first stage.
“Stage 1 will last for the next two years. It’s been hectic for the last four years and certainly now with the new licenses the pace will change. In the first stage, with the branches coming up, we will increase our headcount by 50%. That means adding another 100-150 people,” Wahi said.
DBS has been in India since 1994. However, bank licenses have been difficult to come by. The bank opened its second branch in New Delhi only in 2005. Since then, its branch license applications stalled as the RBI, Monetary Authority of Singapore and the governments of the two countries could not agree on issues pertaining to corporate investments.
After DBS was given licenses in March however, Singapore awarded the State Bank of India “qualifying full bank” license to open new retail banking branches. ICICI Bank is also in line for branch licenses in Singapore.
Wahi told DNA Money that DBS is “excited” about its new branches and is not ruing the delay or thinking about future expansion.
“Right now we are happy with what we have got. We got whatever we asked for. We got all the branches in the locations we asked for,” Wahi said.
Besides its banking business, DBS also has a non-banking finance company in partnership with the Chennai-based $1.63 billion Murugappa group. Cholamandalam DBS finance caters to the mass market, offering personal loans, vehicle finance and corporate finance.
Wahi said the venture with Murugappa will stay, as the bank and the NBFC cater to different markets.
“Our banking business and our joint venture with Cholamandalam are mutually exclusive. Cholamandalam and the bank are not doing the same business. They have a space in consumer finance. We do wealth management and corporate banking, we don’t do truck finance, auto finance and home equity,” Wahi said.
DBS is aiming to be the preferred bank for Indian companies doing business in South East Asia and for companies from that region doing business in India.
“There have already been so many developments with Tata Steel buying NatSteel in Singapore and Millennium Steel in Thailand. Punj Lloyd has also acquired SembCorp E&C in Singapore. Also there is a big opportunity with the increase in trade between India and China,” Wahi said.
“Besides Singapore is also a very important place for real estate investment trusts with 65% of the surplus funds in Asia. Such funds are also catching up in India.”
r_joel@dnaindia.net
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