PTI
Mumbai
DBS Bank India swung back into the black with a small profit in 2015-16 and to widen retail footprint, the Singapore-based lender will offer an interest of 7 per cent on its savings bank (SB) accounts, which is highest in the industry.
Unlike the competition, which offers 6 per cent (Kotak Mahindra and Yes Bank on deposits above Rs 1 lakh and RBL 7.1 per cent for above Rs 10 lakh), DBS will pay 7 per cent even on Re 1 balance.
“We have returned to profit with a marginal profit in FY16 after the losses in FY15,” DBS Bank India Chief Executive Surojit Shome told reporters here on the sidelines of an event to launch the bank's newest product offering. But he did not offer more details.
Reverses on bets taken on infra and construction sectors had led to a loss of Rs 275 crore in the previous fiscal, where it had to write-off loans and make heavy provisions.
Shome said the quantum of core capital which the Singapore parent had to infuse also went up to Rs 670 crore last year, while over the past two years, it has infused Rs 1,700 crore in tier-II capital. The bank has so far invested Rs 6,500 crore in the country.
At present, India accounts for just 5 per cent of its overall loan-book, but accounts for the highest investments outside of the capital employed to cover up for bad assets, Group Chief Executive Piyush Gupta said.
Singapore's largest lender DBS Bank Tuesday said it has unveiled India's first mobile-only bank - 'digibank'.
Gupta said the bank is able to give a higher interest of 7 per cent as against the current 5 per cent for up to 40,000 savings bank account-holders, because of the savings which will be accruing to it will be passed on to the customers.
He said this offering is possible because of investments in digital and added at the group level, it has increased its spend on digital to SGD800 million this year from SGD 700 million a year ago.
It is targeting to enroll five million accounts through the Digibank initiative and take the deposits up to Rs 50,000 crore in five years, Gupta said.
The bank also plans to add asset-side products to the offering, gradually and build a book of Rs 10,000 crore in the next five years, Gupta added.
Terming India as far superior in digital infrastructure than other Asian countries it operates in, Gupta said the bank chose to launch Digibank here first because of the Aadhar-based eKYC (know your customer) offering.
It plans to take the same product to Indonesia and China after this, where the regulators have now floated discussion papers on how to utilise the digital infrastructure, Gupta said.
The launch of the product will also help improve cost to income ratio, Shome said, adding it plans to take it down to 45 per cent from the present 55 per cent.
When asked if the Digibank scheme will impact branch rollout plans, Gupta said DBS continues to target to take the total branches to up to 70 in the next four-five years from the 12 and explained that its focus on small businesses will require it to increase its footprint.
The expansion plans depend a lot on the progress on its move to operate as a wholly-owned subsidiary here, Gupta said, adding even after nearly a year, the bank is yet to receive the go-ahead from Reserve Bank.
He, however, said this is as per the guidance given by the RBI at the time of application for the WOS model.
