Westpac Banking Corporation, Australia’s oldest bank, opened its first branch in Mumbai on Thursday to cater to the needs of corporate and retail customers. Vikram Nimkar, its CEO, shares the plans with Neelasri Barman in an interview. Edited excerpts:
Westpac Banking Corporation received banking licence from the Reserve Bank of India (RBI) earlier this year. Who are your target customers?
We have been here for five years as a representative office and we have a good understanding of the Indian market. Given the kind of trade linkages between India and Australia, our customers will be Indian, as well as Australian companies that operate in India. From the retail side, there are students and migrants who fly to Australia. So, we will be supporting them as well as their families in India.
RBI has proposed the presence of foreign banks through the subsidiary route in India. What are your views?
There is jurisdiction, moving towards the subsidiary route. At some point, it might become a norm in different markets particularly the emerging markets. RBI has proposed that it wants the subsidiary route and has prepared even guidelines. We had a look on those guidelines. Our India strategy does not change. If we are required to form a subsidiary, then we will do that.
What are your views on financial inclusion, as RBI believes foreign banks should play a larger role in that over here?
Financial inclusion is a regulatory requirement and that is the policy RBI wants to push forward. From a foreign bank’s perspective, financial inclusion would mean you actually welcome any walk-in customers. Our strategy includes that. Wherever, we are, if the customer wants to open an account with us, we will cater to that.
Could you tell us about the balance sheet size, you are eyeing, in India?
In the next five years we would certainly like to have a meaningful size of revenue from here that will add to our Asia revenue. Our Asia strategy is to contribute meaningfully to the group revenue. In terms of balance sheet size from India, we are aspiring to have at least $1 billion (Rs 5,498 crore) in the next five years.
How many branches do you want to open in the next few years?
At least two more branches in the next five years on an organic basis. Subject to RBI approval, of course. From the strategic perspective, we are here for the long-term.
What kind of customer base you are targeting in the next five years?
I would like to play the round number game and have at least 100 corporate and Foreign Institutional Investors (FII) customers, which would include multinationals and Indian corporates. In terms of assets, it would largely be corporates. We will be serving the retail customers through liability products, by offering them accounts. At this point, we wont be offering them products like home loans etc.
How do you see the competition in the banking industry here?
Competition will exist in a fair market and it is good to have competition. I look at it more from an opportunity perspective. Until some time back, there were no Australian banks in this market. Now all four of them are in this market. Until some time back, India was not one of the top five trading partners for Australia. Today it is the fifth largest trading partner. The expectation is that the bilateral trade between these two countries will expand further and that will be predominantly driven by commodities and services. So when you look at these aspects, there is a lot of opportunity for Australian banks to add value over here for customers from either side.
What is going to be your USP in this market?
Every bank has a different strategy. We have our strength on the corporate segment, which is the energy and natural resources segment. It is a competitive market and also has opportunities. We certainly want to be customer-focused and be able to grow with the customers. On the retail segment, it can be either done through a price strategy or through a value-added strategy. If you look at the customers segment - students and migrants, being Australia's first bank and Australia's second largest bank, there is a clear value-addition on that side.
The Indian services become more of a value addition extension. We are starting with simple banking products like savings account, term deposit account, remittances, payment services. We are offering the whole comprehensive services that any Indian bank would offer.
