HDFC Bank Ltd, India's second-largest private sector lender, announced on Monday the opening of its third overseas branch at Dubai International Financial Centre, and said the bank would continue to be cautious with its international expansion plans.
The new outlet will provide a whole range of wealth management services to non-resident Indians based in the UAE, senior bank officials said at a Press conference.
The DIFC branch's advisory services to affluent NRIs will encompass treasury products, trade finance, loans and other related services.
The bank, also the second largest in India in terms of NRE deposits, is offering these services only to NRIs with a net worth of above $500,000.
The Bahrain and Hong Kong branches of the bank also offer corporate, trade finance, loans and deposits to both corporates and ultra high net worth individuals, said Abhay Aima, Group head - Equities, Private Banking, Third Party Products, NRI and International Consumer Business, HDFC Bank.
On the bank's expansion plans in the GCC and other overseas markets, he said the bank would continue its conservative approach. "We are not in hurry to make our presence across the globe," he said. Aima said HDFC Bank, through its two representative offices in Dubai and Abu Dhabi, would continue to provide facilitation of services for NRIs with regard to their accounts held with branches in India. The bank also partners with exchange houses across the GCC countries for NRI remittances.
"The UAE and DIFC in particular has emerged as a major financial center and the launch of this branch reflects our commitment to the Indian community in the region. We will continue to expand our off-shore operations to meet the banking requirements of our valued customers," said Aima.
Ashish Parthasarthy, group head – Treasury, HDFC Bank said that the bank is offering a wide range of products for corporates / SMEs through its Bahrain & Hong Kong branches. With the setting up of DIFC branch the distribution of such products to Gulf clients will be easier. Aima said the bank, which has the second largest NRE deposit size of $10 billion accounting for 10 per cent of the total such deposits in India, is among the fastest growing lenders in terms of NRI client base. Non resident Indians from the UAE account for 40 per cent of the bank's NRE deposit, he pointed out.
He said HDFC has also garnered the maximum amount of funds via the concessional swap window for FCNR(B) deposits. The second largest private sector bank has raised $3.4 billion, much higher than other lenders, through the window, made available by the Reserve Bank of India to banks in order to attract dollar inflows to stabilise the rupee.
Aima said the bank, which has a distribution network with 3,488 branches and 11,426ATMs in 2,231 cities/towns, is very well capitalised. At the end of the June quarter, the bank's capital adequacy ratio was 15.1 per cent, according to Basel-III norms, while its tier-I capital adequacy ratio was 11.1 per cent.
He said the lender would fully comply with Basel-III norms by 2019. The bank recently announced plans to raise up to Rs 100 billion from the market to ensure a 2.5-3 per cent improvement in the tier-I capital adequacy ratio, he pointed out.On the overall banking scenario in India in the aftermath of the new government coming to power, Aima said the banking industry expects to sustain a strong credit growth estimated at 15 per cent in 2014-15 and 18 per cent next year.