8 November 2009
India has a savings rate of around 36.3 per cent, one of the highest in the world, despite the fact that only 40 per cent of Indian households operates a bank account, Stuart A. Davis, chief executive of HSBC, India told Khaleej Times.
He said consumer finance was only about 2-3 per cent of the gross domestic product, or GDP, compared with 25 per cent in Europe.
Only two per cent of the Indian population has insurance cover, while less than one per cent of the population is active on the stock market. “There is, therefore, a great growth opportunity for banks and financial institutions in India,” Davis said during his recent visit to the UAE, along with Sanjay Nair, Global Head of NRI Services.
Analysts expect at least 20 per cent annual growth for the Indian banking sector over the next few years, he added.
India, Davis believes, is one of the best places for investments. “Along with China, India is possibly the only emerging market that will see a six per cent or more growth. I believe the economic prospects are good for India, which has a strong domestic market as well as a growing middle class with increasing financial needs in terms of sophistication and international scope.”
He said that proliferation of Indian professionals across the world made non-resident Indian, or NRI, business stream a very important one for international banks with strong footholds in the country.
The Middle East accounts for a significant concentration of the 25 million Indian Diaspora spread across the globe. “The Middle East region has a population of 3.8 million Indians of which HSBC’s target segment comprises 74 per cent,” said Davis.
HSBC serves the dual banking needs of these NRI customers through its 14 international NRI branches and a network of 47 branches in 26 cities in India, said Davis, who is based in Mumbai.
He said that the NRI business of HSBC had seen a sustained upward trend. The business has seen over 45 per cent increase in NRI deposits from June 2008 to June 2009.
“We have significantly expanded our market share. In the Middle East, we are market leaders and our premier customer base, excluding the public domain, has grown over 65 per cent from August 2008 to August 2009,” said Sanjay Nair.
In the UAE, the HSBC Middle East Bank and the NRI Services unit of HSBC India — a licensed representation office — work jointly together to ensure high quality customer services, said Nair.
“Based on our insight that NRI customers have special needs — since they have banking requirements overseas as well as back home in India, HSBC launched the “OneWorld” plan in the UAE,” said Nair.
The OneWorld plan enables customers to open NRI account in India while they are in the UAE, as well as open an account with HSBC in UAE, while you are in India. They can also get assistance in choosing from a range of investment products in the UAE through HSBC UAE and in India through HSBC India through wealth management services, he explained.
Other facilities offered through OneWorld include free money transfers across the UAE and India through cheques, as well as Internet banking.
