Singapore’s biggest lender and Asia’s leading financial services firm DBS Group Holdings announced that it received in-principle approval from the Reserve Bank of India (RBI) to convert its existing India franchise to a locally incorporated wholly-owned subsidiary (WOS) in India.
Issuing a press statement, DBS said, “Through WOS, DBS will leverage its overall strengths and resources, along with its experience in India, to build a scalable business through a multi-channel strategy. This will include a combination of digital and physical formats to allow the bank to cater to the requirements of convenience and presence by its target customer segments. DBS will be able to bring its product innovation and technology-led delivery model from across Asia to serve retail, small and medium enterprise (SME) and large corporates across a larger footprint.”
Piyush Gupta, CEO of DBS Group, said, “The bank expects to move to a subsidiary structure from the current branch structure in the country in the next six to nine months and was open to injecting more capital into the Indian business.”
He said, “DBS has been present in India for over 20 years. Over this time, we have grown to become the fifth-largest foreign bank in India. As we look into the future, I believe India’s consumption boom, investment and export drive, as well as positive policy action, will further fuel its growth, making it one of the biggest stories in Asia by 2030. With this local incorporation, DBS will be able to build greater scale in India, enabling us to better participate in India’s rise.”
Pointedly, the RBI made the announcement in 2013 that it would treat foreign banks operating in the country on nearly equal terms with local lenders if they moved to a wholly owned subsidiary structure.
However, very few banks have shown interest. DBS was among the first to apply for a wholly-owned subsidiary in India.
The approval gives DBS the ability to expand its products and increase the number of its branches across India.
DBS Bank’s net profit in India stood at INR13 crore on March 31, 2017. The bank currently has 10 branches in India.