Q&A: Subhas DeGamia, CEO, ANZ India,
'We have identified India as a strategic market'
Australia and New Zealand (ANZ) Banking Group has re-entered Indian banking space after a decade, opening its first branch in Mumbai last month. In an interview with Somasroy Chakraborty and Abhijit Lele, the India chief executive, Subhas DeGamia, shares its plans here. Edited excerpts:
Why did it take so long for ANZ to re-enter India? Why did you choose to restart your India operations now?
ANZ sold the Grindlays business across South Asia in 2000. It was a strategic decision at the time, to concentrate on strengthening the bank's position in its home markets of Australia and New Zealand. During this period, ANZ continued to grow its operations and technology hub in Bangalore, which now employs 5,000 people.
As we grew our businesses over the last decade, our position in the Asia-Pacific region has strengthened significantly. We believe we are now positioned well to offer relevant products and services to Indian customers. It fits well with our strategy of becoming a super-regional bank in the Asia-Pacific region.
Asia is in the forefront of growth. India and China are the real drivers of this growth. India's trade, investments and economic ties in the Asia-Pacific are growing. For instance, India is now Australia's fourth largest export destination —exports have grown 12-fold in 10 years — and one of its fastest growing trade partners.
Therefore, our strategy is aimed at supporting the regional trade and investment flow and providing connectivity from and into India.
Which businesses do you plan to focus in India initially?
We have received approval from the Reserve Bank of India (RBI) for only one branch. Our initial focus will be to support our corporate and institutional clients. We will offer rupee and foreign currency products and services, including funding and hedging solutions, trade finance, foreign exchange management, cash and payments and debt capital markets.
Our objective is to provide access to our customers across 32 markets and areas that we specialise in, like natural resources, agriculture and infrastructure. We also aim to provide access for our global customers to Indian markets.
Will you be interested in commencing retail banking here?
ANZ operates across institutional, commercial, wealth and retail segments in different markets around the world. It is important to phase our expansion in India. We certainly will not develop full businesses in every market where we are present, as we need to be relevant to the needs of the customer in each market. We have identified India as a strategic market and we will look to broaden the franchise over the next three to five years, with the regulator's approval.
RBI prefers foreign banks to set up a subsidiary in India. Are you comfortable with that idea?
ANZ is familiar with the process of incorporating a subsidiary. We have done that in China and Vietnam. In India, the process is still at a proposal stage. We will look at the details and take a decision when the proposals become policy.
How much capital has ANZ infused in its India franchise? What is the current headcount and how many people do you plan to hire?
The minimum capital foreign banks need to start operations in India is $25 million (Rs 111.5 crore). We have capitalised our India franchise well, to ensure it supports our customers with a wide range of relevant products and services. We have hired experienced bankers with a deep insight into the Indian market. Our current staff strength is 70 and as we broaden our franchise, the number will go up to 200-250 over the next two to three years.