DBS receives India clearance
(5 September 2017 – India) DBS Bank has received in principle approval from Reserve Bank of India (RBI) to start a local banking subsidiary, allowing the Singaporean lender to open more branches and expand its reach in the retail and small to medium enterprise (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 within two years.
According to the bank, it has invested US$1 billion in capital in India thus far.
To meet regulations, DBS must lend 40 percent of its net bank credit to borrowers in sectors such as agriculture or to small enterprises within five years of opening a local subsidiary.
“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.
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.
DBS plans to open branches around the 90-odd SME clusters in India.
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