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DBS poised for further expansion in India with the signing
of CECA
By Derek
Cher, Channel NewsAsia
Time
is GMT + 8 hours
Posted: 07 July 2005 1804 hrs
SINGAPORE:
DBS Bank said it was poised for further expansion in India.
The
bank currently has 2 branches there - in Mumbai and New
Delhi.
Under
the Comprehensive Economic Cooperation Agreement or CECA
signed between Singapore and India recently, DBS can open
up to 15 new branches over the next 4 years.
But
DBS said its pace of expansion would depend very much
on how this agreement was administered.
DBS
is currently the only Singapore bank to have a presence
in India.
Its
operations there have expanded by almost fivefold over
the past few years, and with the recent signing of CECA,
the bank said it is poised for a much faster expansion
within India.
But
exactly how fast will depend very much on when regulators
can issue DBS the branch licSINGenses.
"It
says 15 branches for all the 3 Singaporean banks and over
a period of 4 years, that's what CECA says. But it doesn't
talk about how it's going to be administered. And that
administration process is something that will get greater
clarity in over the next few weeks. Our hope is we will
move fast in this, because we believe the flow between
Singapore and India is going to increase," said Rajan
Raju, managing director of DBS Bank.
Even
if one bank gets all 15 branches, it will still be a major
challenge to enter India's mass retail market.
DBS
said it will need a footprint of about 250 branches in
order to compete with Indian banks for this market.
Just
before the CECA was signed, DBS went into a partnership
with one of India's largest consumer finance company -
Cholamandalam Investment and Finance.
With
a distribution network of 120 branches, this deal allows
DBS to reach out to the fast-growing Indian middle class.
"With
our Cholamandalam partnership, we should be looking at
getting new products into the Indian market which are
focused around SGX-related funds, collective investment
schemes and exchange traded funds that we can give to
Indian investors, which is something that's not possible
without CECA. So in my mind, CECA actually adds a lot
of value to what we have done to Cholamandalam,"
said Mr Raju.
Mass
retail aside, DBS believes there are ample opportunities
available in India.
It
said Indian companies are increasingly looking towards
the East for funding - a situation which it can take advantage
of.
DBS
was the number 2 loans syndication bank in India last
year, just behind Citigroup, and it was instrumental in
the listing of the first Indian company - Meghmani Organics
- in Singapore. - CNA /dt
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