Already the largest foreign bank in India, Standard Chartered has sought the Reserve Bank of India's permission to open 100 rural branches, which are in addition to its annual plan of 40 new branches and 300 ATMs this year, which it has submitted to RBI for approval.
Asked if the rural thrust was influenced by the United Progressive Alliance government's war cry of inclusive growth, Peter Sands, the UK-based bank's group chief executive, said: "Absolutely. In all the markets in which we operate, we seek to understand what a community or a government is trying to achieve."
The bank, which now has 83 branches in 33 cities in the country, has announced that it is investing $250 million to take its total capital base in India to $1.9 billion.
Apart from organic growth, Standard Chartered, which opened its first branch in India in Kolkata in April 1858, has grown rapidly in the last eight years by acquiring ANZ Grindlays, American Express and UTI Securities.
Its current expansion drive appears significant in view of the government's commitment to open up the sector next year, removing the limitations on operations of wholly-owned subsidiaries of foreign banks and treating them on a par with Indian banks. This will allow them to list on bourses, dilute equity and acquire other banks subject to the equity ceiling of 74 per cent.
The rural expansion that Standard Chartered has planned, the first such by a foreign bank in India, will change it in several ways. "I think it will significantly reposition the bank. If we go on this sort of rural expansion, it will be a dramatic change," said Sands.
The products and services delivered in small towns will certainly be different from those in the metros.
"The kinds of products and the way you would deliver them would be somewhat different
