DBS Group Holdings Ltd., Southeast Asia’s largest lender by assets, has sought Reserve Bank of India approval to set up a wholly owned unit in a move to deepen its presence in the South Asian nation.
The Singapore-based lender expects to complete the conversion of its India business into a subsidiary by the end of next March, Chief Executive Officer Piyush Gupta told reporters in Mumbai Tuesday. It may have as many as 75 branches by 2020, Gupta said.
“Going into early next year, we should be able to operate through a subsidiary platform,” he said. “That is important to us, as our ambitions for India are to scale up from being a large corporate bank to being a universal bank.”
Establishing a local unit in India will help the lender open branches anywhere in the world’s second-most populous country under the same rules governing local banks. DBS is expanding its presence in Asia to reduce its reliance on its home base, where economic growth is slowing.
DBS, which already has 12 branches in India, said last July it was exploring the formation of a local subsidiary after the central bank eased procedures for foreign lenders.
Growth in Singapore’s economy cooled to an annualized 1.1 percent in the three months through March from the previous quarter, when it had expanded 4.9 percent. India’s $1.9 trillion economy is set to grow 7.5 percent in 2015, surpassing China’s pace for the first time since 1999, according to projections by the International Monetary Fund.
DBS is looking to build its consumer banking, and small and medium enterprise businesses in India, Gupta said.
“India is expected to contribute a larger share of DBS’ global revenues,” he said.