Banks have to be SME-led to be successful in India: DBS

Mumbai: DBS Bank India said India is very important for the lender, from the City-State, both from the capability creation and also for business expansion standpoints.

“We are convinced that for any bank to be successful in long term in this country, it cannot be in the creamy layer. You have to go deeper into the market and it means that you have to be small and medium enterprise-led and you must have retail foot print and presence,” said, DBS group chief executive, Piyush Gupta.

“Unlike other banks who want to stick to the top-end of the market, we want to go deep,” he added.

His comments came after the Singapore-based lender announced that it is looking to treble its balance sheet size over the next five years from about Rs 50,000 crore currently and will be setting up around 100 customer touch-points over the next 12-18 months.

Last week, the Reserve Bank had approved the Singaporean lender’s proposal to become a wholly-owned subsidiary (WoS) and Monday it announced the official launch of its locally-incorporated unit – DBS Bank India. The lender is the largest foreign bank to become a fully-owned local subsidiary.

“In the short-run, which is over the next five years, we want to grow our balance sheet three times. We crossed Rs 50,000 crore in 2018 and we think over the next five years, we can triple that,” chief executive of DBS Bank India, Surojit Shome told reporters.

The lender’s deposit base stood at Rs 30,000 crore of which the low-cost Casa stood at around 18 per cent and Shome said the plan is to take Casa ratio to over 25 per cent over the next few years.

“Our aim is to get the share of our retail business both on the liability and asset sides to about 30 percent of our revenue and profitability,” Shome said.

DBS, which operates in 12 cities – Chennai, Delhi, Mumbai, Bengaluru, Kolkata, Pune and Nashik, among others, plans to establish over 100 customer touch points, a combination of branches and kiosks, across 25 cities in the next 12-18 months at an investment of Rs 125-150 crore.

This month, it will open nine new branches in Hyderabad, Ahmedabad, Coimbatore, Vadodara, Indore and Ludhiana.

Since the 2008 global financial crisis, the RBI has been insisting that those of them who want to grow faster should become wholly owned subsidiaries and that it will not allow any new branch licences.

It had also made it mandatory for those foreign banks with over 20 branches – only three now-StanChart, HSBC and Citi-will have to convert themselves to WoS if they want to open new branches. DBS is the second foreign lender to operate through the WoS model in the country after State Bank of Mauritius.