Singaporean lender DBS is committed to switch to operating as a wholly-owned subsidiary (WOS) in India, but difficulties around getting a viable business model are delaying its adoption of the new model preferred by the central bank, a top official has said.
"The more difficult thing is to work out a solution as to how do you make a viable business proposition out of the current regulations and that is something we are evaluating now," DBS managing director and chief operating officer Vijit Yadav told PTI.
"I am not saying it is impossible to form an exact business proposition. I think it is an onerous task to understand the nitty-gritty of what the implications are of going into the WOS model and then building a plan around it," he said.
Yadav was replying to a question on the delay in DBS' converting into a WOS model even a year after RBI came out with its final guidelines for the same. He, however, declined to give a timeline by when the bank will turn into a WOS.
The bank, which has the government of Singapore as its biggest shareholder, was the first and the only foreign lender to go public with its intention of turning into a WOS rather than operate as a branch.
Yadav said the bank, which operates 12 branches in the country, is currently at the planning and evaluative stage but affirmed commitment to turn into a WOS, given the strategic importance India has for the DBS group.
"It's in our planning internal approvals phase... I think there are various people looking at it simultaneously," he said, stating that the go-ahead will have to be received from various bodies including the regulators like Monetary Authority of Singapore and RBI, after which a secretariat and company formation will take place.
