Global turmoil may have forced many foreign banks to exit non-profit making India businesses but Singapore-headquartered DBS Bank has a different story to sell: retail banking.
The lender is now planning to expand its retail footprints through remittance business between Singapore and India, and domestic secured and unsecured loans business.
DBS is the only bank to have applied to RBI to convert its branches into a wholly-owned subsidiary.
“The online remittance volumes from Singapore to India through our platform, DBS India Remit, have doubled over the past one year,” said Rahul Johri, managing director, head – consumer banking. “This not only generates fee income for DBS but also creates a platform to attract customers to other banking services of DBS.”
“We are also planning to introduce personal loans, credit cards and multiple-currency foreign exchange cards in the next nine to 18 months,” he told ET.
DBS India Remit, the online platform for inward foreign exchange remittances to India for DBS Singapore non-resident Indian clients, has brought down funds transfer time to just four hours for DBS India account holders. This service is now available in five metros.
But it takes 48 hours to transfer funds in far-flung cities and towns in India. DBS will soon extend the service to smaller cities and towns as well.
DBS now sees 60,000 transactions involving $150-160 million per month. The size and scale were half a year ago.
“The service will become a differentiator for us to attract Singapore-based NRIs to bank with us as we grow our distribution reach,” Johri said. About 2.5 lakh NRIs bank with DBS in Singapore.
DBS India offers home loans and loan against properties, launched last December. The lender expects to attain a book size of Rs 3,000 crore in the next three years from Rs 100 crore now. So far, it is selling such products primarily to affluent customers in five cities, including Pune, Mumbai, Delhi, Kolkata and Bengaluru.
“As we garner more business and the processes become robust, we will enter new markets,” said Johri.
“We would define a road map for branch expansion once we start operating under the subsidiary route subject to central bank approvals.”
During 2014-15, the bank incurred a loss of Rs 275 crore as it wrote off loans in the construction and infrastructure sectors, which had gone bad. In the previous year, it had posted a profit of Rs 2 crore. Its overall loan book grew 4.55 per cent to Rs 15,845 crore. The bank did not grow its construction and infrastructure portfolio during the year.
Asset quality improved due to write-offs and increased provisioning. Net non-performing asset ratio reduced to 4.15 per cent during the year, from 10.19 per cent in the previous year.