MC EXCLUSIVE Barclays Bank India to remain a wholesale-focused lender, says CEO Pramod Kumar

Pramod Kumar, CEO Barclays Bank PLC, India and Vice Chairman, Investment Banking, Asia Pacific

With India and UK renewing commitment to deepen business ties, British multinational lender Barclays Bank is keen to support capital flows and cross border opportunities between the two economies, Pramod Kumar, CEO - Barclays Bank India and Vice Chairman - Investment Banking, Asia Pacific has said.

Speaking exclusively to Moneycontrol, Pramod Kumar said Barclays will continue to remain a wholesale focused bank, backed by its private banking business. At this juncture, the lender does not see much merit to turn to a wholly owned subsidiary model in India, he added.

Also Read: India will continue to see more inbound and domestic interest: Pramod Kumar, CEO, Barclays Bank India

Bet on India's growth story

“Given the strong growth we are witnessing in the market, supportive regulatory environment and the overall corporate sector development with better governance, stronger financial strength, greater global connectivity, the cross border flow of capital into and out of the country provides us with the right backdrop to continue to invest in our business,” Pramod Kumar said, adding that Barclays Plc has injected about Rs 5,500 crore into the Indian operations in the last five years.

“India remains an attractive market for us to continue to invest and grow our business across our investment banking, corporate bank, markets and private banking businesses”.

Flexibility over formality

Regarding the wholly owned subsidiary model, Kumar said Barclays has grown in India significantly in the last few years without having felt the need to turn into a 100% subsidiary. “The RBI encourages the framework around a wholly owned subsidiary, primarily to give level playing field to foreign banks, particularly those looking to undertake M&A (of banks in India). For banks like us, who've been in India for over 35 years and have a well-established client franchise, we don’t really feel the need to undertake M&A as part of our growth strategy,” Barclays Bank’s India CEO said. However, the flipside is that foreign banks are subject to higher rate of taxation. “…if you look at it in the broader context, the current branch structure gives us greater degree of flexibility, without any limitations to operate,” said Pramod Kumar. However, some tax concessions could help, he felt. “We do hope the Government will address the adverse tax treatment, as they undertook a small positive step in that direction recently”.

Validation in momentum

When asked about competition from Japanese and Middle East banks, Kumar said the growing interest in Asia is a validation of India’s economic strength and increasing comfort around the resilience and regulatory maturity of its banking sector. Kumar said it is a result of India emerging as an attractive geography, demonstrating consistent economic growth and greater political stability, providing confidence to these institutions. “The banking sector will fundamentally benefit from and facilitate this growth. Banks that have had a limited presence in India in the past are now expanding their operations,” he added.

Kumar said he is comfortable with the pace of growth at Barclays in India and the lender is growing the business incrementally. “Given the 6.5-7 percent annual GDP growth, we foresee the proportion of our India business to go up over time,” said Pramod Kumar, adding that the market opportunity is attractive for Barclays to continue to invest in India and grow further.