The UK-headquartered bank plans to tap the growing consumer finance market via the non-banking finance company route that will allow it to get the reach, which otherwise gets restricted because of the branch licencing policy for foreign banks.
Neeraj Swaroop, CEO, Standard Chartered India, said the bank would sell small-ticket consumer loans - up to Rs 50,000 - under the brand of PC Finance, a Hong Kong-based consumer finance company which it had recently acquired.
The bank would use its subsidiary, Standard Chartered Investments and Loans (India), as a platform for the PC finance business.
Most of the consuming class segment is unable to avail of personal loans from banks owing to documentation issues and end up paying huge interest rates for their various needs including for buying consumer durables.
"We will serve this segment with reasonable rates of interest. We plan to increase the NBFC's network from 10 branches now to 100 branches in a year's time," Swaroop said.
He said, "Typically, people belonging to this segment are unable to authenticate their credit record via documents such as income proof, bank statement et al. Our model follows a face-to-face credit assessment model."
The locations it will select for opening branches will be like Kandivili, a western suburb of Mumbai, where most of its target customers reside or work in the lower end of the small and medium enterprises.
The customer profile will include sales personnel at retail chains, the modern youth working at call centres and BPOs, who are considered key drivers of the growth in the consumer durables market.
The new areas that the bank has forayed into are project finance, commodity finance and agri-related initiatives. Under corporate banking, Stanchart recently entered the middle markets field under SMEs.
Swaroop sees growth for the bank coming from new product segments, SME and middle market initiatives, wholesale banking, consumer finance and mortgage and auto loans.
He expects a 15 to 20 per cent growth in income in 2006 and a similar or less growth in profit depending on the investments the bank makes in customer acquisition.