DBS Bank India Ltd (DBIL), the newly-formed subsidiary of Singapore-based DBS Bank, plans to triple its balance sheet in the next five years from the existing ₹50,000 crore, its chief executive officer Surojit Shome said on Monday.
“In the short run, which is five years, we will grow our balance sheet three times. We crossed ₹50,000 crore this year and, as we close the year, our balance sheet size will be a tad over ₹50,000 crore. We think over five years, we can triple that," said Shome.
The bank also plans to establish over 100 customer touchpoints, which will be a combination of branches and kiosks, across 25 cities in the next 12-18 months.
In March, DBIL plans to open nine new branches across Hyderabad, Ahmedabad, Coimbatore, Vadodara, Indore and Ludhiana. It will also expand its footprint in Mumbai, Gurugram and Noida, besides adding five branches in unbanked rural centres.
Shome said the bank has deposits of about ₹30,000 crore, of which 15-18% are in current and savings accounts (Casa), and expects the Casa ratio to grow beyond 25% over the next few years. Casa ratio is the share of current and savings deposits in the total deposits of a bank.
“Currently, the loan book is primarily corporate, and we have a relatively small 10% retail loan book. We will build the consumer and small and medium enterprise (SME) business over the next five years, and our aim is to get the share of our retail business both on the liability and asset side to about 30% of our revenues and profitability."
The Reserve Bank of India (RBI) wants foreign lenders in India to function through wholly owned subsidiaries in order to insulate banking operations from any crisis the parent may be facing, and to ensure better regulation.
In November 2013, the central bank had released a framework for the setting up of wholly owned subsidiaries by foreign banks in India.
Piyush Gupta, chief executive office, DBS Bank, said it cannot be completely reliant on the digital medium, given that many other technology companies such as Alibaba and Amazon are learning the same thing.
Companies are learning that they need some degree of physical presence, partly for the brand, partly to create trust and partly to do some of the last-mile servicing that they sometimes need, he said.
“Therefore, the idea of using subsidiarisation is to produce and create enough physical presence so that we can complement the principally-digital strategy with some on-the-ground capabilities." Gupta added that DBS Bank is willing to make the commitment for creating its subsidiary by putting in capital, adhering to different priority sector lending norms and follow governance requirements.
The bank was set up with a representative office in India in 1994.
It had opened its first branch in 1995, and currently operates across 12 cities, including Delhi, Mumbai, Bengaluru, Chennai, Kolkata, Pune, Nashik, Surat, Kolhapur, Salem, Cuddalore and Moradabad.
