DBS bets big on India
What provides better shade, warmth, freshness and protection - a rose plant or the entrenched oak? Deeper the better, one would always argue. Unless you firmly establish your roots, you can't nurture, protect and assist. Banking is similar.
DBS too, prefers globally to be an ingrained entity across countries it operates in. This aspiration to become an embedded bank in India received a boost when DBS was recently granted an in-principle approval by The Reserve Bank of India to convert its India franchise to a locally incorporated wholly-owned subsidiary (WOS).
With this proposed conversion the bank will now be better positioned to build a scalable business through a multi-channel strategy to serve retail, small and medium enterprise (SME) and large corporates across a larger footprint.
India's thriving middle class
DBS is a strong believer in India and views it as one of Asia's big stories in the next 20 years. This belief stems from various encouraging macro-economic, demographic trends and government policies in place in the country.
- Consumption is poised to take off with growing middle-class coupled with corresponding growth in the average household income. Further fuelling this credit consumption story is the fact that India has an exceptionally high savings rate of 31.6% and the household debt to GDP remains low at 10% as compared to 40% in China and 60% in Singapore.
- From a demographics perspective too, India is rightly positioned to reap dividends of its growing youthful population - with its working age population yet to peak. Forecasts are that between 2015 and 2040, its working population will rise from 66% to 68% of total population.
- Accelerating and bringing the Indian banking potential rapidly to the forefront is the Government's "Digital India" movement. Now, digital cashless transactions are driven through remotest part of the country, not just via 400 million smart phones, but through 600 million traditional feature phones as well.
India with its existing backbone of biometric and mobile-linked AADHAR is aptly placed for DBS to leverage its experience in leveraging technology to better serve its customers. India was therefore logical and the first choice amongst 18 countries that DBS operates in to launch digibank, the country's first mobile-only bank, which has already garnered 1.5 million customers in its first 15-months.
SMEs to power Indian economy
Given its Asia leadership DBS has been at the forefront for providing large Indian corporates financing solutions across their entire value chain by actively leveraging its region wide expertise and connectivity to offer best-in-class cross-border banking solutions.
Through WOS, DBS Bank India can now expand geographically and make inroads into various SME clusters dotting the Indian landscape. Using this dispensation, DBS Bank India intends to replicate its success with large Indian corporates with SMEs in the country.
On the back of favourable policies by the Government like 'Make in India' and 'Start-up India', the SME sector in India is expected to contribute 17% to India's GDP and 45% to India's total output. DBS Bank India has already embarked on its SME journey by targeting the supply chain of its large corporate accounts. From a digital perspective, it was the first bank in India to aid SME, make seamless payments to ease the GST burden off their shoulders by integrating their ERP and accounting component with its SME banking platform.
DBS - Gateway to Asia
India's jump of 30 spots up in the World Bank's Ease of Doing Business report for 2018, is seen as a manifestation of Government's success in its bid to reform and streamline the economy. This status is further expected to improve as GST implementation will come in to play for the next ranking.
This ranking further entrenches India amongst the fastest growing economies in the world. In lieu of support that the Government's 'Look East' or "Act East" policy, aiming at stronger trade relations with neighbouring Asian countries has been garnering, DBS being South- East Asia's largest bank is best poised to assist these companies expand offshore.
DBS Bank India with its strong cross border footprint, in-depth cultural insights and banking expertise is best positioned to play an important role as a conduit to connect these key markets to its customers and contribute to the growth of this new vibrant India.