Standard Chartered is poised for an expansion unprecedented in scale and one that will transform the bank by giving it a sizeable presence in the rural areas, including a consumer finance brand.
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 The products that would appeal to small businesses in rural communities are not the same as the products that will appeal to India's largest corporate houses," said Sands.
The Standard Chartered branches in the rural areas will be supplemented by the outlets of Prime Financial, a consumer finance brand it acquired in Hong Kong and brought to India some time ago.
"We are always looking at what more we can offer. Prime Financial is one example. UTI Securities is another. We keep looking at the way our customers' needs are evolving," said Sands.
He is determined to go much beyond merely token involvement. "It is often said that an international bank is only interested in serving major corporate houses and certain parts of the population. By unilaterally submitting an application for these 100 rural branches, we are indicating that actually we are ready to serve the border range of the population and business communities," he said.
The hunt for manpower -- it is an issue in the banking industry, even more so for an expanding bank has already taken Standard Chartered to more than two dozen business schools. Earlier, it would only hire from the top five or six Indian Institutes of Management.
In fact, it has also begun to hire non-MBAs.
The bank is setting up a $500 million micro-finance facility with the target to touch an estimated 4 million people in the emerging markets.
In India, the bank aims to partner with over 20 micro-finance institutions by December this year and extend operations to the North and the North-East.