Bank: DBS Bank gets nod to operate wholly-owned subsidiary in India

MUMBAI: DBS Bank, Singapore’s largest lender with $355 billion in assets, has received inprinciple approval from Reserve Bank of India (RBI) to start a local banking subsidiary in the country which will allow the Asian lender to open more branches and expand its reach in the highyielding consumer and SME banking sectors in the country.

DBS Group CEO Piyush Gupta said the bank plans to get a final approval in the next six to nine months which will allow it to expand from the present 12 branches to at least 75 branches in the next couple of years. The bank has invested $1 billion in capital in India so far.

DBS will have to lend 40% of its net bank credit to borrowers in sectors such as agriculture or to small enterprises within five years of opening a local subsidiary.

DBS Bank gets nod to operate wholly-owned subsidiary in India

“We have domestic franchises in China, Taiwan, Hong Kong and Indonesia, so in that sense a local subsidiary is in the bank’s DNA. Physical points of presence will help us get into new businesses like supply chain financing, SME lending, transaction banking and consumer finance which require points of presence across the country,” Gupta said. DBS, along with State Bank of Mauritius (SBM), had applied to RBI to open a local subsidiary in 2015. SBM has received an inprinciple approval and is awaiting final nod from RBI, India CEO Siby Sebastian confirmed.

Under guidelines released in November 2013, RBI promised to treat foreign banks opening local subsidiaries on an equal footing with local lenders, giving them the freedom to open branches and allowing them to acquire local banks on a later date.

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DBS plans to open branches around the 90-odd SME clusters in India.