SBM Bank India, the first foreign bank to get a wholly-owned subsidiary licence, wants to be an Amazon-like financial marketplace, offering everything, including basic banking, digitally but through tie-ups with technology partners , says a top official of the lender.
The state-owned Mauritian lender got the licence to operate full-banking services from the Reserve Bank in December 2018 and began operations the next year. Singaporean DBS Bank is the only other foreign bank to operate a fully-owned subsidiary here after operating on a branch model for long, while lenders from Oman and Korea are awaiting licences from the regulator.
The parent has pumped in Rs 500 crore in equity capital into the SBM Bank India when it got the licence and converted its trade finance branch with a balance sheet of Rs 600 crore into a full fledged bank, the bank's Sidharth Rath managing director and chief executive told PTI.
Since operations began 18 months ago, the balance sheet has grown to Rs 2,500 crore, of which Rs 2,000 crore is the new loan book. Fund-based asset is Rs 1,500 crore and non-funded asset is Rs 500 crore, he said, adding its deposit is Rs 2,000 crore. It has been adding Rs 300 crore to the asset base each quarter, across its six branches in Mumbai, Delhi, Ahmedabad, Bengaluru, Hyderabad and Chennai.
While the Hyderabad branch is rural, the seventh branch is coming up in rural Palghar near Mumbai, Rath added. On growth outlook, he expects loan book to cross Rs 3,000 crore and deposits scale past Rs 3,500 crore by March.
The bank has a heavy corporate loan book (large and mid-sized companies) which is 90 per cent of our asset with retail being just 10 per cent, Rath, who joined from Axis Bank, said, adding going forward the have licence to have 16 more branches over the next two years of which four will be mandatorily rural.
“We will not be doing the traditional way of banking. We are putting in place a digital strategy that is uniquely developed for India under which we want to be a financial marketplace, something like Amazon or Flipkart, and not just limit ourselves to be a lender in the traditional sense,” Rath said.
“We will offer every financial service but not as a bank but through our digital platform. What we want is an open architecture banking where startups and fintechs etc, do the job for us,” he said, adding it will be a highly asset light model, wherein we'll just be owning the brand and checking misuse.
The bank does everything--deposit collection, credit lending, micro lending, remittances, credit cards, payments, broking , i-banking, wealth management, and even supply chains-- but all through its vendors as it doesn't want to build them and own them, he said.
“This is something unique as nowhere else we have tried something like this. In short, we will be a technology platform but we will not be even building any of them on our own,” Rath said, adding, “we will be truly digital bank wherein services will be offered by our tech partners on our behalf. But we will not build the network, instead we will do an Amazon of banking.”
Our primary role will be getting the experts to provide these services under our brand name, then meet all KYC norms and then ensure that the platform is not misused, Neeraj Sinha, the head of retail and consumer banking.